Labor Market

As regular readers of my posts on Econlog know, although I am often critical of Paul Krugman, I defend him when he's doing good economics (here, for example). His New York Times column yesterday, though, "Walmart's Visible Hand," essentially throws... MORE

I promised a few weeks ago to "write a further note explaining a more-sophisticated way of understanding the harmful effects of the minimum wage." This isn't it. The reason is that three issues came up in the comments and e-mails... MORE

Legal scholar Eric Posner has written a piece on Slate defending various restrictions on students' speech. Robby Soave, at Reason's Hit and Run blog, has a good critique of much of Posner's article. But I want to point out a... MORE

I was talking to a fellow academic economist today who is also a strong critic of military conscription. He had read my post in which I discussed my disagreement with the late W. Allen Wallis about amnesty for draft dodgers.... MORE

The late Milton Friedman was the one of the strongest and most eloquent opponents of military conscription. In all my conversations with him, though, and in all of his writing on the draft, I don't recall whether he took a... MORE

Ever since the 1970s, I've favored wage subsidies for low wage jobs, and I've opposed the minimum wage and the guaranteed annual income (GAI.) It seems to me that this article in The Economist has some bearing on the debate... MORE

Each January the government revises its payroll jobs estimates, to provide more accurate figures. The recent revisions are not dramatic, but do slightly strengthen two arguments that I've been making over the past few years. Let's look at the previous... MORE

Two weeks ago today, I gave a talk at Susquehanna University in Selinsgrove, Pennsylvania. I had a good time, by the way, and I estimate that, in the midst of a small snow storm, over 150 students and faculty attended.... MORE

Back in 2000, Robin Hanson wrote a paper entitled "Shall We Vote on Values, But Bet on Beliefs?", which offered a way forward for economics in the 21st century. Unfortunately his ideas were ignored (and even ridiculed) and today we... MORE

UPDATE BELOW If you are an American male under age 67, you should take a moment and give thanks to Hoover Institution Senior Fellow Martin Anderson, who died on January 3. Why? Because he helped contribute to ending military... MORE

David Henderson has a recent post discussing the costs and benefits of tax avoidance. Here I'll discuss a similar issue, the pros and cons of hand-to-hand currency. In an earlier post I argued that eliminating currency would solve the "zero... MORE

Paul Krugman says that the reduction in long-term unemployment has been rather disappointing. This is important, because 2014 was a sort of "natural test" of the hypothesis that the extended unemployment insurance program led to higher unemployment. The program ended... MORE

A couple of weeks ago, I posted a video of Jonathan Gruber and me testifying on the economics of government mandates on employers to provide health insurance. We basically agreed on the analysis: the cost of those mandates is borne... MORE

I'll put aside the irony that many people on the right are borrowing a page that many on the left use on other issues by blaming a climate of opinion for the two Brooklyn cop murders. My own view is... MORE

"What Michael did was the exception, not the rule," Luzinski said. "He didn't have to do this. The law allows you to skate by and pay your creditors 10 or 20 cents on the dollar, but he thought this was... MORE

When the U.S. minimum wage law was put into effect in 1938, northeastern labor unions gained from it by pricing out their competition. Unions in the textile industry were seeing textile firms move from New England states to southern lower-wage... MORE

In July 1994, Jonathan Gruber, then an assistant professor of economics at MIT, and I, then the John M. Olin Fellow at Washington University's Center for the Study of American Business, testified on the economic effects of government mandates on... MORE

I just learned from a friend on Facebook that Nathaniel Branden died this morning. He was 84. I learned a lot from his weekend "intensives" and the second one I went to gave me the courage to leave the University... MORE

Yesterday, in a comment on my post about the Taylor Rule, Patrick R. Sullivan reminded readers of the famous debate between the late Milton Friedman and the late Walter Heller about the relative potency of monetary and fiscal policy. Friedman... MORE

I was on the road from Sunday a.m. to late last night and thus my sparser than usual blogging. I taught classes in Patuxent River, MD on Monday, Norfolk, VA on Tuesday, and Arlington, VA on Wednesday, with lots of... MORE

Around the same time, Canada cut government expenditure by 18.9% without social turmoil - and without greatly reducing health, justice, or housing programmes. They did this while maintaining tax levies, so the result was a reduced public deficit and falling... MORE

After years of playing down the problem, technology companies like Google, Facebook and Apple now say they're serious about improving the gender and ethnic diversity of their work forces and corporate boards. Recent data from those companies and others like... MORE

The person who wants to get you fired is not your friend. Daniel S. Hamermesh and Elena Stancanelli recently presented data showing that Americans work longer hours, and more night and weekend hours, than Europeans. I'm not familiar with Professor... MORE

In a July post, Matt Bruenig estimates that in the absence of government programs to alleviate poverty, the percent of Americans who would be officially classified as poor would be a whopping 23.8% versus what it actually is: 15%. Go... MORE

Matt Yglesias has a good post that goes right at the "smiley-face" view of early US history--that we were a great country save for the regrettable aberration of slavery. He doesn't pull any punches: Specifically, white Americans conquered a vast... MORE

A few weeks ago I did a post pointing out that pundits on both the left and the right have moved further to the extremes, and away from sensible policy views. I just noticed another example today, an article... MORE

Bryan Caplan has a post showing that Janet Yellen is one of the sensible Keynesians, who understands the problems caused by sticky wages. Here's the Washington Post discussing Yellen's views: The stagnation in wages despite a pickup in hiring over... MORE

Like many people, I mourn the loss of Joan Rivers. In the last year or so, my wife and I have gotten into watching Fashion Police and enjoying, except for her over-the-top comments, many of Joan's great, obviously prepared, catty... MORE

From: My Department of Credit Where Credit Is DueI've previously insisted that when there's high unemployment, all good Keynesians should say "Wages must fall!" I'm delighted to learn, then, that Janet Yellen is one of the good Keynesians.The stagnation in... MORE

Like many entrepreneurs, Bush began by trying to solve one problem and ended up having to solve another. The problem that he and his partner tried to solve was reducing the cost of childbirth, in part by making more effective... MORE

Every Labor Day in the last few years, we hear about the decline of unions and how that has been a bad thing. What I find striking is how economically uninformed most of this commentary is. Start with the fact... MORE

In an otherwise excellent reporting piece in the New Republic, Senior Editor Noam Scheiber gives his view about why the governor's race in Wisconsin is so important. To recap, Governor Scott Walker is running for reelection and he's the one... MORE

Here is The Economist: IF ABENOMICS means anything, it is the promise of the prime minister, Shinzo Abe, to restore healthy economic growth to Japan and end years of deflation. To that end the central bank, sloughing off its... MORE

Over lunch one day, colleagues and I were talking about students' handwriting (mine is positively atrocious), and one of my colleagues suggested that students learn to write decently as they will at the very least need to be able to... MORE

In a powerful post 2.5 years ago, "Eureka! Economic Illiteracy as Mental Substitution," co-blogger Bryan Caplan takes one of Daniel Kahneman's most-powerful insights in his Thinking, Fast and Slow and applies it to the economic illiteracy that we see in... MORE

In yesterday's Wall Street Journal, David Neumark argued that even though "modest increases" in the minimum wage won't have large disemployment effects, the minimum wage is a poorly-targeted anti-poverty measure: "Minimum wages are ineffective at helping poor families because such... MORE

I wear a hat as a Senior Research Fellow for the Institute for Faith, Work, and Economics. In the last several days, IFWE has run a few pieces on their blog that have really stood out to me in light... MORE

On Friday, the New York Times ran this article by Timothy Egan, which discussed the new Starbucks initiative to pay for associates' college degrees but which was mostly a hit piece aimed at Walmart. Walmart VP of Corporate Communications David... MORE

I'm now writing the most number-crunching parts of The Case Against Education: one chapter on education's selfish return, another on its social return. The work is grueling, and haunted by the fear that I've made an early mistake that invalidates... MORE

The answer to yesterday's data challenge: full-time, year-round workers can be unemployed, but only very briefly. You don't have to actually work full-time to be a full-time worker. "Full-time" workers can be unemployed indefinitely as long as they "usually worked... MORE

At the start of this year, the minimum wage in SeaTac, a city in Washington state, was raised by a whopping 63 percent--from $9.19 an hour to $15.00 an hour. If we critics of the minimum wage, including the late... MORE

Matt Yglesias has a post suggesting that if the NBA were "any normal industry" it would not be able to get away with collusive schemes like the NBA draft. For those who don't follow American sports, the new players entering... MORE

Consider: Why does any business hire an employee? It happens based on the belief that the business will make more money with the employee than without it. The business pays you, you do work, and, as a result, there are... MORE

From The Case Against Education: Normal 0 MicrosoftInternetExplorer4 How People Get Good At Their Jobs If schools teach few job skills, transfer of learning is mostly wishful thinking, and the effect of education on intelligence is largely hollow, how on... MORE

Each year, America sets aside a week to salute the men and women who do the difficult, dangerous, and often thankless work of safeguarding our communities. Our Nation's peace officers embody the very idea of citizenship -- that along with... MORE

In his recent debate on immigration with my co-blogger Bryan Caplan with my friend Alex Nowrasteh, Mark Krikorian makes two interesting points. The first is that the term "open borders" is not an accurate description of what many of us... MORE

"I ... part company with many of the conservatives of my party on the issue of the minimum wage," he said in an interview on MSNBC's "Morning Joe." "I think we ought to raise it because, frankly, our party is... MORE

On Tuesday, I spent all day at a retirement planning seminar with more than 100 other federal government workers. Talking to a few of my colleagues around my same age (63), I jokingly referred to it as an AARP event.... MORE

Over the past 5 years I've done a number of posts discussing a strange phenomenon. My views on money/macro are in many respects quite close to the consensus view of 2007: 1. Fiscal stimulus is ineffective. 2. Monetary stimulus can... MORE

What I find interesting about the case of Los Angeles Clippers owner Donald Sterling is how well it illustrates Gary Becker's insights on the economics of discrimination. Becker pointed out that the market makes people "pay" for discriminating on racial... MORE

Even before Mark Carney took over as Governor of the Bank of England, he showed signs of independent thinking. Most famously, he came close to endorsing NGDP targeting at a speech in Toronto during early 2013. More recently, he hinted... MORE

The writer of Schindler's List would understand. The Economist writes: But on March 29th Cuba's parliament approved a new foreign-investment law that for the first time allows Cubans living abroad to invest in some enterprises (provided, according to Rodrigo Malmierca,... MORE

Many people assume that Germany has long been an economic success story. It was certainly successful back in the 1950s and 1960s. But as recently as 2004 it was widely viewed as the "sick man of Europe" despite all those... MORE

In the past 10 years Germany as gone from being the "sick man of Europe" to the star of the eurozone. This partly reflects the strong job creation that preceded the recession, perhaps due to the labor market reforms of... MORE

Donald Boudreaux takes on one of Robert Reich's recent arguments for the minimum wage. Reich writes: A $15/hour minimum is unlikely to result in higher prices because most businesses directly affected by it are in intense competition for consumers, and... MORE

Over at Marginal Revolution, Tyler Cowen posted a question asked by a 3rd-year medical student who's a regular reader of MR. Here's the question: I am a 3rd year medical student, and for the purposes of this question, let's assume... MORE

The minimum wage and welfare (broadly defined to include unemployment benefits and such) curiously interact. As I've previously explained:The minimum wage deprives the unfortunate workers shown in red of their ability to support themselves. Given this involuntary unemployment, the case... MORE

The Wall Street Journal has an article entitled; "Gas Boom Rejuvenates Manufacturing." There certainly are some manufacturing sectors that will be helped by the energy boom. However people shouldn't expect too much from this development. In a recent post I... MORE

This is a touchy subject, so let's begin with an analogy to clarify things. Years ago I read that drunk drivers were involved in 1/2 of all traffic fatalities. I'd guess the ratio was also high for accidents that put... MORE

In his excellent post on Francis Walker's 1896 piece attacking open borders, Bryan didn't mention just who Francis Walker was. I'm sure Bryan knows, but it might help other readers to know. Walker was not just some nativist rube or... MORE

I worry about growing income inequality. But I worry even more that the discussion is too narrowly focused. I worry that our outrage at the top 1 percent is distracting us from the problem that we should really care about:... MORE

There's a lot of discussion about the natural rate of unemployment. Some think we are already close to the natural rate. Others think the labor market is much weaker than the official 6.6% figure would suggest. Evan Soltas has what... MORE

Don Boudreaux asks minimum wage supporters to answer two questions they should have asked themselves long ago.Question #1:Name some other goods or services for which a government-mandated price hike of 25 percent will not cause fewer units of those goods and services... MORE

There's a new piece in The Economist discussing the disturbing rise of youth unemployment all over the world. Oddly there is no mention of minimum wage laws. When supply doesn't equal demand, shouldn't artificial price floors be the first place... MORE

I've finally got around to reading more details about the Congressional Budget Office's report on the number of jobs lost from raising the minimum wage. The CBO estimated a range of outcomes from raising the minimum wage from its current... MORE

All three factors can combine to make the value of the insurance policy well below its price. Let's say that the family values the insurance at $3,500. That family is worse off because it is paying $4,000 net of the... MORE

When education correlates with a good outcome, labor economists are usually eager to publicize the fact. There is, however, one glaring exception. Labor economists rarely announce that the well-educated are more likely to marry a well-educated spouse - and capture... MORE

Tyler Cowen recently linked to an article in the Washington Post about "the excellent Jason Furman." And if you read the puff piece article, you would certainly think Furman is an excellent economist. The writer, Zachary A. Goldfarb, tells tale... MORE

Paul Krugman was upset over a recent column by Casey Mulligan. Here's Krugman: Jonathan Gruber is mad as hell, and he's not going to take it anymore. The eminent health care economist and health reform architect is annoyed at Casey... MORE

Obamacare defenders and Princeton University economists Paul Krugman and Alan Blinder have granted that the Congressional Budget Office is making a reasonable claim in saying that by 2024, Obamacare, if not repealed or delayed, will reduce the number of hours... MORE

The answer to this question might seem obvious, but it isn't. Yes, booms feature lots of jobs and income, but most standard macro models suggest that booms feature "excesses," with too much employment and perhaps over-investment too. In the... MORE

Some take it as a matter of faith that increasing taxes will dull people's desire to work. However, higher taxes can sometimes cause people to work more. When higher taxes reduce the after-tax wage, people are poorer for any given... MORE

In this article, I explain why, even if the revisionist empirical studies are accurate, it still does not follow that the proposed hike in the minimum wage will be a boon for low-skilled workers. I also argue that, because critics... MORE

In my discussion with Alan B. Krueger on NPR on Wednesday, I pointed out that governments in the United States hamper or prevent entry into many hundreds of occupations. I gave as an example the taxicab monopoly in Monterey and... MORE

Lant Pritchett is enjoying justified praise for his new The Rebirth of Education: Schooling Ain't Learning. His central thesis: schooling has exploded in the Third World, but literacy and numeracy remain wretched. The average Haitian and Bangladeshi today have more... MORE

In a post earlier this month, I reported on a Brief Analysis I did for the National Center for Policy Analysis, drawing on a journal article by Sabia and Burkhauser, showing that a hypothetical increase in the minimum wage from... MORE

Recently, there has been a brouhaha in the blogosphere over comments made by Paul Krugman and then responded to critically by Russ Roberts and Bob Murphy. Chris Dillow then defended Krugman. The issue--and everyone on both sides agrees that this... MORE

"Fear is Why Workers in Red States Vote Against Their Economic Self-Interest" is the title Robert Reich gives yesterday's post on his site. Reich starts by addressing why no one in West Virginia complained [I'm taking his word for it... MORE

Economists Joseph J. Sabia and Richard V. Burkhauser examined the effects of state minimum wage increases between 2003 and 2007 and reported that they found no evidence the increases lowered state poverty rates. Further, they calculated the effects of a... MORE

UPDATE below: Walter thought the draft was wrong because he thought that people should be able to make such an important choice--whether to join the military or not--for themselves. His passion for free labor markets was what motivated his work... MORE

Both economists and laymen often claim that unemployment statistics paint an overly rosy picture of the labor market. Why? Because they refuse to count discouraged workers as "unemployed." To qualify as "unemployed," you have to look for a job. But... MORE

In "Redistribute wealth? No, redistribute respect," Noah Smith argues that we should pay more respect to people who work in currently less-respected jobs. To that, I say a hearty "hear, hear." I also like the title, although I'm not sure... MORE

If you are an American male under age 66, you should take a moment and give thanks to economist Walter Oi, who died on Christmas eve. Why? Because he helped contribute to ending military conscription. Conscription ended on June 30,... MORE

From the Christmas newsletter of a good friend of mine who just got a post-doc in France. Reprinted with his permission. Names omitted to hinder bureaucratic retaliation.In early March I got accepted for a position in [city redacted] France, and... MORE

Is this from The Economist or from Yes, Prime Minister? Scepticism about the merits of minimum wages remains this newspaper's starting-point. But as income inequality widens and workers' share of national income shrinks, the case for action to help the... MORE

From chapter 4 of my book in progress, The Case Against Education. Normal 0 MicrosoftInternetExplorer4 Signaling has been one of economists' more successful intellectual exports. After Spence and Arrow developed the signaling model of education in the 1970s, the idea... MORE

Most researchers oversell their results. After re-reading Dale and Krueger's latest piece on the selectivity premium, however, I suspect that they are greatly underselling their results. They haven't just undermined the value of academic selectivity; they've confirmed the value of... MORE

UPDATE BELOW: I just heard from a KQED news producer a few minutes ago that Nelson Mandela has died. Mandela was a great man. The obvious reason was his courage and persistence in fighting against Apartheid. The somewhat less-obvious reason... MORE

Increases in the minimum wage are usually "phased-in." Instead of raising the minimum wage overnight, the law usually specifies a series of steps. The Fair Minimum Wage Act of 2007 increased the prior $5.15 minimum wage in three steps: ...to... MORE

In his partial defense of the Pope's views on economic policy, Ryan Avent writes: Neither did economic growth magically free American slaves or end Jim Crow. There was nothing inevitable about the end of institutionalised racism in America, and without... MORE

This morning, I skimmed through a textbook on Alabama history that I picked up at Goodwill earlier this semester so I can bring myself up to speed on some of the major facts, themes, names, and dates in Alabama history... MORE

After my Intelligence Squared debate, I had a long chat with my opponent Ron Unz about his latest cause: a huge increase in the minimum wage. For Unz, the disemployment effect of a high minimum wage is a feature, not... MORE

Tyler recently approvingly quoted Brad DeLong paraphrasing Larry Summers:My friend and coauthor Larry Summers touched on this a year and a bit ago when he was here giving the Wildavski lecture. He was talking about the extraordinary decline in American... MORE

GMU economic historian Mark Koyama emailed me some comments on my Industrial Revolution post. Reprinted with his permission. Note that Billington's figures imply a work year between 3900 and 4500, even assuming, contrary to Billington's lurid picture, that workers got... MORE

In 11th grade, I took Advanced Placement U.S. History. I enjoyed it at the time. Once I started studying economics, however, I was outraged by the economic illiteracy of my history textbooks. Mainstream historians barely mentioned the unprecedented miracle of... MORE

The human capital and signaling stories can both explain the existence of malemployment. But malemployment research still provides some of the most compelling evidence in favor of the signaling model. The latest draft of my The Case Against Education explains... MORE

But when the minimum wage law confronts the law of demand, the law of demand wins every time. And the real losers are the most marginal workers--the ones who will be out of a job. This is a quote from... MORE

Last week, David linked to a reprinted press release from Reuters titled "Business Owners Welcome White House Support for $10 Minimum Wage." Here are a few thoughts: 1. I think the headline is meant to create mental disequilibrium for the... MORE

"This is great news. Raising the minimum wage will help America succeed," said Jon Cooper, the President of Spectronics Corporation in Westbury, NY. "Employers like me need to do our part by paying a decent minimum wage - closer to... MORE

"No one benefits from making it more difficult for an individual who owes money to make money." When I teach my Cost-Benefit course, I give out a problem set early in each quarter in which one of the questions is... MORE

Watching co-blogger Bryan Caplan's debate on immigration and seeing Vivek Wadhwa's performance, and then reading his post-debate comment to Bryan, I asked myself: If Wadhwa were in the position of poet Emma Lazarus, how might he have written her famous... MORE

In a recent blog post, my friend Don Boudreaux writes: In short, monopsony power in labor markets keep workers underpaid. With all those underpaid workers out there--and because there are no government-enforced prohibitions on starting companies that employ low-skilled workers--a... MORE

Even famous economists occasionally tell me that, "Firms have no incentive to train workers in general job skills." The argument: Once firms teach workers general job skills, the newly-trained workers can immediately threaten to quit unless they get a raise. ... MORE

Academics habitually tax the public's patience with stupid questions. It's easy to see why practical folk ignore us. Every now and then, though, an academic asks a truly profound question that seems stupid on the surface. Case in point: David... MORE

I just answered an email from some seventh-grade students who were asking about my Forbes.com article "Immigrants, Sweatshops, and Standards of Living." I suggested they look up Benjamin Powell's work, particularly this article on sweatshops that he wrote for the... MORE

Two years ago, David Leonhardt argued that B.A.s pay, even for careers that don't require them. The title: "Even for Cashiers, College Pays Off." Is this true?I've spent the last two weeks tracking down the data. Leonhardt relied on Anthony... MORE

My impression is that customers treat workers worse than bosses. But perhaps I'm wrong. Question for all people who interact with both customers and bosses: who treats you worse?Please show your work.... MORE

Most countries have a long list of "worker protection" laws. Laws protect workers against low pay, lack of benefits, discrimination, sexual harassment, overtime at normal pay, and much much more. Basic labor economics teaches us to view these laws with... MORE

A Micro-Mincer regression estimates personal income as a function of personal education and controls:ln Personal Income = a + b*Personal Years of Education + other stuffUnless b is very large, b approximately equals the individual education premium. b=.09, for example,... MORE

UPDATE BELOW: The title of this post is the same as the title of a post I wrote in January 2013. Why do I use the same title? Because of this statement from Brad DeLong: I mean, some employers are... MORE

We've often heard the complaint, "Isn't it awful that public safety workers such as firemen, whose work is so important to us, are paid so little while professional athletes are paid so much?' Before getting to some interesting answers to... MORE

Fogg and Harrington provide an excellent intro to the empirics of malemployment. Highlights:Definitions:Mal-employment, a variant of underemployment, is based on the concept of over-education. It represents a mismatch between skill requirements of the job and the education of the worker:... MORE

From an early age, my father warned me that if I refused to major in engineering, I could easily end up driving a taxi. As I matured, I discovered that his over-the-top warnings had a firm basis in fact. Many... MORE

David Lee of Princeton University and Emmanual Saez of University of California, Berkeley have an article in the Journal of Public Economics titled "Optimum Minimum Wage Policy in Competitive Labor Markets." It has two strange results, one that I understand... MORE

Tyler just bet me at 10:1 that U.S. unemployment will never fall below 5% during the next twenty years. If the rate falls below 5% before September 1, 2033, he immediately owes me $10. Otherwise, I owe him $1 on... MORE

I mistrust prescient empirical researchers. If you claim that your research confirms your predictions in every detail, you might be a genius, but you're probably just extremely unobservant. One of the reasons I so greatly admire Truman Bewley's Why Wages... MORE

I finally got around to reading Truman Bewley's Why Wages Don't Fall During a Recession cover-to-cover. The book is a miracle - easily one of the five best empirical economics books I've ever read, and possibly the best of the... MORE

Yesterday afternoon, I came home from walking at Point Lobos Park with a colleague. We watched probably about a dozen large whales off the shore. It's the most I've ever seen. When I got home, I couldn't park in front... MORE

Slate has redeemed itself after that awful piece by Allison Benedikt that co-blogger Art Carden criticized yesterday. One highlight of Ms. Benedikt's piece that caught my attention was this: I went K-12 to a terrible public school. My high school... MORE

During recessions, demand for both housing and labor plummets. But the two markets respond in very different ways.In the housing market, we usually see dramatic price falls. Lots of properties sit on the market for months. But almost any property... MORE

Earlier this year, I argued that Casey Mulligan's theory of labor market contradicts introspection:Ask yourself:When someone gets laid-off, what is his main emotional reaction likely to be? Sorrow.When someone gets a nominal wage cut, what is his main emotional reaction... MORE

Neat stuff from Baker, Jensen, and Murphy's "Compensation and Incentives: Practice vs. Theory" (Journal of Finance, 1988):The lack of financial incentives reported by Medoff and Abraham [32] and summarized in able I is surprising, but even more surprising is the... MORE

Suppose your firm has a mediocre employee. He's not ridiculous, but he's worth a lot less than you pay him. What does your firm do?Econ professors' knee-jerk answer is, "Fire him." But people with real jobs often notice a rather... MORE

We got together with some neighbors last month and held a yard sale. A good number of our customers were Spanish-speaking immigrants. Co-blogger Bryan Caplan discusses research suggesting that more immigrants make for higher real estate values in the Cato... MORE

Paul Gu, one of the winners of Peter Thiel's 20under20 fellowships, has co-founded a company called Upstart. In this guest post, he explains his idea, pre-answers common questions, and solicits novel questions. And now... Paul Gu! Human Capital Contracts for... MORE

I got a lot of great comments on last week's post about what would happen if tipping became the norm at McDonald's. See especially these comments by Eric Rall, Jeff (nice catch, but I'm using "McDonald's" as a stand-in for... MORE

Proposed hikes to minimum wages and improvements in working conditions are not free lunches, and at least part of the cost gets passed on to consumers in the form of higher prices. The reply from advocates of the higher minimum... MORE

Tuesday's article about McDonald's and minimum wages got a decent amount of attention and a lot of comments of varying quality. Before my article appeared, Forbes staff writer Clare O'Connor had published a piece borrowing estimates from the University of... MORE

I've read a few of the comments on my Forbes.com article about minimum wages, and there seems to be a lot of agreement that one of the real problems is that executives are overpaid. If that's true, then I have... MORE

In 1919, U.S. Steel Pulled a Branch Rickey My economic historian friend, Jeff Hummel, has recommended for years that I read David M. Kennedy's Freedom from Fear: The American People in Depression and War, 1929-1945. Kennedy is a first-rate historian... MORE

UPDATE BELOW: Last week, my wife and I saw the movie, "42." It's about Branch Rickey, general manager of the Brooklyn Dodgers, hiring Jackie Robinson to play baseball for him in the mid to late 1940s. I recommend the movie.... MORE

UPDATE BELOW: OMG. Even economist Paul Krugman screwed up on this one. A Facebook friend provided a link to the following article from 2009 by John Carney and Vincent Fernando. It's titled "French: The Most Productive People In The World."... MORE

Check out Paul Krugman's graph of participation in the food stamp (SNAP) program and U6 unemployment. MAKE SURE YOU LOOK ONLY AT THE GRAPH. Don't read his words around the graph. Then ask yourself what you think the relationship is... MORE

If you have been following the news on unpaid internships lately, you will have noticed that they're becoming increasingly at risk legally. Here's an excerpt from a recent news story in USA Today: The controversy over unpaid internships escalated recently... MORE

Kelly Miller was the first black admitted to Johns Hopkins. He became a professor of mathematics at Howard in 1890. In 1895, he introduced sociology to the curriculum and became a sociology professor. One of his essays, "The Negro and... MORE

I promised earlier to post on a couple of Paul Krugman's posts that caught my eye. In a June 10 post, "Unemployment Benefits and Actual Unemployment: An Analogy," Krugman admits the point that unemployment benefits can increase the unemployment rate... MORE

Here's a great story about Ken Ilgunas, a young man who dug himself out of two years of undergrad student debt. How did he do it? By moving to Alaska, getting a job, and not spending. In two years, he... MORE

Back in 2009, I posted three pieces on Steven D. Levitt and Stephen J. Dubner's book Superfreakonomics. As with their first book, there were strengths and weaknesses. I highlighted them here, here, and here. I never posted, though, on their... MORE

An economist who has published in the American Economic Review has written a paper that s/he thinks is his/her best work--estimating a probability of 1/3 that it lands in the AER. The anonymous author is offering to sell the paper... MORE

Federal workers' total compensation far exceeds that of private sector workers. The CBO says so, and so does a large academic literature. One glaring omission, though, is federal job security. High job security is nice to have during normal times,... MORE

There's a rumor, presumably well-founded, that Jason Furman will become the next Chairman of the Council of Economic Advisers. Given the universe of people from whom President Obama probably chose, I think it's probably a good choice. Four years ago,... MORE

Bewerunge and Rosen's working paper on public- versus private-sector compensation begins with a discussion of recent controversy:Putting the inflammatory rhetoric aside, much of the debate boils down to the question of whether public and private sector workers receive about the... MORE

Back in 2010, USA Today and other popular media loudly declared that federal employees were grossly overpaid. Famed economist Peter Orszag swiftly denied this allegation on behalf of the Obama administration. I found his response extremely suspicious, but was too... MORE

Recent Twitter exchange between myself and Tyler:@tylercowen: [ZMP] is about morale effects in the workplace, not "finding something for them to do," the latter is trivially easy.@bryan_caplan: This reply deserves mischief-free elaboration.@tylercowen: Is there a difference?@bryan_caplan: Asking "Is there a... MORE

Why are apparently good workers unemployed for so long in recessions? One channel that Tyler has promoted is ZMP: Some workers are almost completely unproductive, so employers can them rather than have them eat up all the pizza on Pizza... MORE

Tyler has an odd interpretation of an interesting story. The story:[R]esearchers sent out 4,800 fake résumés at random for 600 job openings. What they found is that employers would rather call back someone with no relevant experience who's only been out... MORE

I've held off commenting on Margaret Thatcher because I didn't know her legacy as well as many did. In 2011, Bruce Bartlett pointed out that she did not succeed in reducing government spending or government revenue as a percent... MORE

My intellectual conscience engages whenever I speak of "Mickey Mouse majors." After all, many people see my own discipline - economics - as a prime example. Are they wrong?It depends. There are at least four different senses of the "Mickey... MORE

I can't wait for Bryan's The Case Against Education: every semester, my beliefs move in favor of the signaling model and against the human capital model of schooling. This isn't to say there aren't a lot of students who are... MORE

While investigating the legality of hiring based on educational credentials and IQ tests, I came across an interesting old post by Half Sigma. Why credentialism is safe but IQ tests aren't:[I]t's OK to use college degrees as a hiring requirement...... MORE

I'm looking for sources about the legality of hiring on the basis of educational credentials. If you've got any pointers for me, please share them in the comments.P.S. Evidence on what firms can safely do in practice is much more... MORE

Casey Mulligan's cleverly titled book, The Redistribution Recession, could have been one of the most important economics books in 2012. It makes the case that a major reason U.S. employment has been so low is that during the recent recession,... MORE

In Being John Malkovich, anti-hero Craig Schwartz whines, "Nobody's looking for a puppeteer in today's wintry economic climate." The Great Recession has made a lot of college graduates feel like Craig Schwartz. If you major in philosophy, history, or puppetry,... MORE

Last Friday, I spoke at my sons' school's Career Day about what's it's like to be an economics professor. I think I told the unvarnished truth, but please judge for yourself.P.S. I feared this "How to Become an Econ Prof"... MORE

In the past, I've faulted economists for ignoring the marriage premium (here, here, and here for starters). Last week, when Pascal-Emmanuel Gobry and Megan McArdle joined my fault-finding expedition, Justin Wolfers pushed back on Twitter:There's no credible evidence justifying the... MORE

Last month, I received an e-mail from a high school student named Kelsey Stolz and I took some time to reply. I think our correspondence would be of wider interest. Here it is. Kelsey: I am a junior in high... MORE

1. My colleague Don Boudreaux wrote a faux news article where politicians pushed for a "minimum grade law" to help struggling students. It's just a matter of simple fairness, of course. I tweeted:Extra bonus of Boudreaux's Minimum Grade Law: banning... MORE

Former Obama economist Christina Romer--she was the chairman of the President's Council of Economic Advisers--has a good, though not excellent, piece on the minimum wage in the New York Times. In it, she departs from her ex-boss's views and points... MORE

What's driving the high price of doctors: market inequality or government entry restrictions? My co-bloggers' debate reminds me of a random encounter with some striking evidence: The Digest of Education Statistics' Table 294.If you peruse this table, you'll discover that... MORE

Which is the binding constraint? My co-blogger Garett Jones posted this week on the supply of doctors, suggesting a new way of thinking about them. He used the idea of opportunity cost: if potential doctors face a high opportunity cost... MORE

Citing an OECD study, Yglesias notes:...America has the highest-paid general practitioners in the world. Why is this? Presumably American MDs are great at using credentialism to restrict the supply of labor, but there's another possible reason that deserves your attention. Really, a... MORE

The Washington Post reports that if the sequester happens...About 800,000 Defense Department civilians could face 22 unpaid leave days, spread out over as many weeks, amounting to a 20 percent pay cut over that period.Because work requirements will not fall,... MORE

There's been a fair amount of discussion on the web lately (here and here, for instance) about the minimum wage and monopsony. As is well known in economics, a skillfully set minimum wage, in the presence of monopsony in the... MORE

President Obama has proposed an increase in the minimum wage from its current level of $7.25 an hour to $9.00 an hour. This is after the George W. Bush increase, between 2007 and 2009, from $5.15 an hour to $7.25... MORE

David's latest reply on illegal immigration is excellent, and I freely concede his two main points as I understand them. Namely:1. A narrow segment of illegal workers would lose in the short-run from legalization:I had in mind a specific group... MORE

David makes a very strong case for the strange-to-me view that employers actually prefer illegal workers. He's especially compelling when he notes:[I]f you're an illegal worker earning less than the minimum, then when you become legal, your ability to credibly... MORE

One of the strangest claims I've heard is that employers prefer to hire illegal immigrants because they don't have to pay them minimum wage or follow other labor market regulations. I can imagine this happening under special circumstances (e.g. everyone... MORE

I'm looking around for U.S. data on employment benefits as a function of education (or, failing that, income). Data on health insurance as a function of education would be almost as good. The ideal table would look something like:Education Level... MORE

People often hope for a "big break" - a large, durable improvement in their situation. An unknown actor landing a major role in a big-budget film is the classic example. But big breaks seem to be everywhere: getting your first... MORE

The latest John Stossel show on Fox Business Network is another home run. In it, he deals with the economics of sports: ticket "scalping," the NCAA's enforcing a monopsony on the labor of student athletes, laws against gambling on sports,... MORE

Have results from the Stanford Marshmallow Experiment ever been used to predict adult income? Or even better, adult income controlling for education and IQ?Any relevant citations are much-appreciated.... MORE

On Thursday, Casey Mulligan lectured on his The Redistribution Recession at GMU. Lots of interesting, neglected evidence on the spike in labor market distortions since 2007. Yet the talk was marred by Mulligan's commitment to a market-clearing model of labor... MORE

When labor economists say "work experience," they usually just mean (Age-Education-5). Industrial psychologists are far more subtle. Quiñones, Ford, and Teachout, "The Relationship Between Work Experience and Job Performance: A Conceptual and Meta-Analytic Review." (Personnel Psychology, 1995) begins by distinguishing... MORE

My colleague Mark Koyama pointed me to Daron Acemoglu's lecture notes on human capital and signaling. Mostly theory, but with some neat empirical points mixed in.Highlight on human capital:But there is some evidence that could be useful to distinguish between... MORE

Then House of Representatives Speaker Nancy Pelosi, in pushing for the Affordable Care Act, aka ObamaCare, said, "We have to pass the bill so that you can find out what's in it." We're finding out what's in it and we're... MORE

Billie Holiday, arguably the greatest jazz vocalist of all time, was also a heroin addict. After serving her first prison term for narcotics possession, she endured further punishment at the hands of the nation's occupational licensing system. From her autobiography,... MORE

Last week, co-blogger Bryan Caplan posed a challenge: "Tell me how to sell the abolition of the minimum wage to the typical Feeling American." The next day, Bryan gave what he saw as the best responses. I thank commenter Phil,... MORE

The best response by far to yesterday's challenge was a pair of tweets by Dan Lin:@bryan_caplan Find a person who got laid off from a charity after minimum wage increase. She tearfully says "I just want to help people."@bryan_caplan Oprah... MORE

When economists say "wage rigidity," they almost always mean downward wage rigidity. Nominal wages almost never come down. Yet in W. Somerset Maugham's Of Human Bondage, set in late 19th-century England, upward wage rigidity plays an interesting role in the... MORE

Vipul Naik of Open Borders sent me a very insightful email on the non-pecuniary returns to education. He's kindly given me permission to reprint it. Vipul speaks:I've been thinking more about your human capital/signaling/ability bias theories of education. It seems... MORE

Last week I posted the following final exam question:Some sociologists have argued that discrimination on the basis of educational credentials should be illegal. What do the human capital and signaling models of education predict about the effect of such a... MORE

My favorite question from my latest Labor Economics final exam: Some sociologists have argued that discrimination on the basis of educational credentials should be illegal. What do the human capital and signaling models of education predict about the effect of... MORE

I was at a conference last weekend at which one of the participants, from Michigan, was excited about the Michigan legislature's passage of a "right to work" law. I started to share his excitement. On the other hand, some libertarian... MORE

It's often wise to pay more attention to marginal tax rates than to average tax rates. If you can make your first $100 tax free but the 101st dollar is taxed at a marginal rate of 99% you'll probably decide... MORE

I saw a woman on Stossel tonight who works for McDonald's. She said she was paid $8 an hour, but felt she deserved $15. I thought: Wait a minute, McDonald's isn't the only company not paying you $15 an hour:... MORE

Last spring I asked EconLog readers about the obviousness of on-the-job incompetence. Most people thought incompetence was very obvious indeed. It turns out that this view is widespread. The General Social Survey asks:In your job how easy is it for... MORE

In response to co-blogger Bryan Caplan, John Smith argues that Singapore needs conscription. Here's where economics is really helpful: in helping us understand the distinction between how big a military to have and how to man a military. Smith argues... MORE

Two decades ago, economists started taking intelligence seriously. Now economists are starting to take conscientiousness seriously. Unfortunately, most existing data sets don't contain personality tests. Even when they do, personality tests are only self-reports. Wouldn't it be great if we... MORE

In an excellent Singapore econ-travelogue, Scott Sumner writes:My theory is that leftists don't really mind a place where income is unequal, they don't like places where income looks unequal. This is close to what pioneering blogger Mickey Kaus has been pushing... MORE

This Thanksgiving, I'm grateful for Joseph Schmidt (1904-1942), my favorite new-to-me opera singer. His music is wonderfully sweet (start here and here), and his life story a lesson to us all. Despite his voice, Schmidt had a problem that seemingly... MORE

Tim Taylor, aka, the Conversable Economist, has a good post on the minimum wage. He makes one crucial error, though. Quoting from his own book, he writes: Here's an insight for opponents of a higher minimum wage to mull over:... MORE

Yesterday I presented my case against education to GMU's Osher Lifetime Learning Institute. As usual, the experience was a true merit good: picture a packed room of retirees full of enthusiasm and curiosity for the life of the mind. The... MORE

I'm pleased to report that the noble Mike Shedlock has paid up on our unemployment bet. You might think this goes without saying, but I'm afraid to say that lesser men have failed to promptly pay up in the past. ... MORE

Saturday I had the chance to see a screening of the much awaited documentary film As Goes Janesville (http://371productions.com/what-we-make/documentaries/as-goes-janesville/ ) by Brad Lichtenstein. The documentary follows the life of a small town (Janesville, Wisconsin, 63,479 inhabitants) as a GM plant,... MORE

Our new co-blogger, Luigi Zingales, in his first post, has done an excellent job of dispelling the conspiracy theory that political operatives in the Obama administration "got to" the professionals in the Bureau of Labor Statistics who gather and report... MORE

About 1%. Bill Dickens, Bryan's first economics professor, writing in the Milken Institute Review:[A] number of estimates suggest that we have paid a price for the extended unemployment benefits adopted by Washington in response to the recession - somewhere between... MORE

This morning, co-blogger Bryan Caplan wrote: Consider the period between 1930 and 1964. What priority did libertarians give to the abolition of Jim Crow laws? How many even considered the issue worth specifically addressing? Towards the end of that time... MORE

My friend and former student Eli Dourado has gotten a lot of attention for his recent post, "The Short-Run Is Short." Key passage:Around 40 percent of the unemployed have been unemployed for six months or longer. And the mean duration of... MORE

Mian and Sufi (who showed that cash for clunkers failed) have written a batch of papers on leverage and the financial crisis. This one may be my favorite: They check to see whether counties with the highest leverage before the crisis... MORE

This is the video of the talk I gave at Middle Tennessee State University Wednesday night. Thanks to Mike Hammock for doing a great job of recording and for inviting me. Mike has given me permission to post this video.... MORE

Why doesn't everyone just follow the rules? The obvious answer, in many cases, is that breaking the rules has concrete advantages... if you don't get caught. Why do people jaywalk? Because it's quicker than schlepping to the crosswalk. Why do... MORE

I'm currently revising my notes for labor economics. Main change: I'm cutting the week on slavery to add a full week on immigration. It's a tough choice because I'm so fond of my slavery lectures. But on reflection, the topic... MORE

The Sorites Paradox works in two directions.Top-down: 1,000,000 grains of sand is a heap of sand; a heap of sand minus one grain is still a heap; therefore one or grain of sand (or zero!) is a heap of sand.Bottom-up:... MORE

Eubulides of Miletus is best-known for the Sorites paradox:The paradox goes as follows: consider a heap of sand from which grains are individually removed. One might construct the argument, using premises, as follows: 1,000,000 grains of sand is a heap... MORE

Teachers like to think that no matter how useless their lessons appear, they are "teaching their students how to think." Under the heading of "Transfer of Learning," educational psychologists have spent over a century looking for evidence that this sort... MORE

In a number of posts, co-blogger Bryan Caplan has argued that many socialists are "born bad." I can't find the references quickly: I'm on a friend's computer and it just isn't working the way mine does. Of course, I don't... MORE

Brink Lindsey sent me a draft of his just-released Human Capitalism (now available for purchase) back in February. Here's what I told him then, reprinted with his permission. From what I understand, Brink took some of my suggestions to heart,... MORE

During recessions, hourly pay for realtors and salesmen falls rapidly. Even if they're largely paid on commission, their unemployment still spikes. Doesn't this show that blaming unemployment on nominal wage rigidity is misguided?I think not. Labor markets for realtors and... MORE

As co-blogger Bryan and many others have noted, today would have been Milton Friedman's 100th birthday. Over the years, I have posted appreciations of him and so I don't want to redo it. Instead, I'll link to a few and... MORE

In the controversy surrounding the uniforms of the 2012 U.S. Olympic team, the problem isn't China. That the uniforms were made there is merely a deep embarrassment and a missed opportunity. Our textile and manufacturing companies deserved that work. You... MORE

Tyler and Arnold have written engaging retrospectives on their Ph.D. cohorts at Harvard and MIT. But I'd rather discuss the contributions of Arnold's classmate - and my undergraduate Econ 1 professor - William T. Dickens. Arnold's right to say:Bill Dickens... MORE

In a post that officially attacks "common sense," Scott Sumner shows that he possesses a great deal of it. Don't believe that nominal wage rigidity can explain continuing high unemployment?[W]age stickiness is a much bigger problem when inflation is low,... MORE

In January 1997, Red Herring magazine, now defunct, published a debate between Paul Krugman and me. It was titled "Does Technology Create Jobs?" Here's one of his key paragraphs: It's also true that higher profits generated by the new technology... MORE

Alex Tabarrok suggests that sexual harassment is analogous to employee theft. If this were so, however, victims of harassment would have an ridiculously easy remedy for their woes: Tell the boss. When an employee tattles on a co-worker for stealing,... MORE

In a post I otherwise applaud, Alex Tabarrok presents an efficiency defense of sexual harassment law: What the theory and the empirical results are saying is that people exposed to a higher risk of sexual harassment are paid more, just as people... MORE

While watching the last 15 minutes or so of the latest Stossel program on Fox Business last night, I became aware that I had a smile on my face and was feeling positive and optimistic. Why? Because during those minutes,... MORE

from Timothy Taylor. Behind Hornbeck's estimates seems to me a deeper pattern of human behavior. When confronted with difficulties, leaving to try somewhere else is hard, but do-able. Staying and continuing with the same behavior is unpleasant, but do-able. But... MORE

In a comment on my post on Walter Williams's book, "liberty" writes: It seems to me that sometimes when free market individualists swoon over the benefits of gaining a work ethic, including having many jobs when young and learning from... MORE

In late June, Gen. Stanley A. McChrystal, the former commander of international forces in Afghanistan, called for reinstating the draft. "I think if a nation goes to war, every town, every city needs to be at risk," he said at... MORE

The Washington Post has the story, but buries the lede. The pharmaceutical industry once was a haven for biologists and chemists who did not go into academia. Well-paying, stable research jobs were plentiful in the Northeast, the San Francisco Bay... MORE

"Up From Poverty" is the title of my review [scroll down to page 12] of Walter Williams's book, Up From the Projects: an Autobiography. Why do I review an autobiography in a publication titled Regulation? Here's why: When economists want... MORE

Chris Bertram, Corey Robin, and Alex Gourevitch write, These are just some of the considerations that lie at the heart of any defense of unions, regulation of contract and the workplace, and workplace democracy. Whether we call that defense egalitarian... MORE

A number of prominent people in recent years as well as many people I run into in academia have been arguing that one virtue of returning to conscription is that it would put the sons of wealthy and politically powerful... MORE

On Monday, my colleague Virgil Storr heard my IHS lecture on "The Case Against Education," and sent me some interesting comments. Here's full exchange, with Virgil's kind permission. Quick question: Do we have good ways of figuring out who will... MORE

Don Peck writes, Today, American companies facing weak demand typically lay off workers, even though that decision can be costly down the road (rehiring and training are expensive). A work-sharing program would allow companies to instead make temporary, across-the-board reductions... MORE

Attention undergraduates: Here is an opportunity for you to get published. Take a look at today's Doonesbury as it's chock full of bad economics. I would like to have a contest to see which undergraduate can produce the best response... MORE

As Josh Barro points out, it is the public sector. San Jose spends $142,000 per FTE on wages and benefits, up 85 percent from 10 years ago. As a result, the city shed 28 percent of its workforce over that... MORE

I've enjoyed the back and forth between co-blogger Bryan Caplan and Trevor Burrus. I'm starting to think that a good line for Vizzini to have used in "The Princess Bride," besides "Never get involved in a land war in Asia,"... MORE

Trevor Burrus continues our previous exchange on merit and liberty (see here, here, here, and here for previous installments). Trevor misses one of my key points here:Bryan asks, if the question of merit is incidental to the case for free... MORE

My article, "Tear Down These Walls," based on my blog post of the same name, is now out in The Freeman. One highlight: Immigration reform would dwarf any other measure economists have considered to help people in poor countries. Take... MORE

The meritorious Trevor Burrus responds to my defense of merit against his critique. Though he's not crying uncle, Trevor concedes a key point:Bryan argues that "the correlation between market success and merit is imperfect, [but] still fairly high." Great success... MORE

A while back I posed the following puzzle to those who dismiss the signaling model of education:Why do students rejoice whenever a teacher cancels class?From a human capital standpoint, students' attitude is baffling. They've paid good money to acquire additional... MORE

The meritorious libertarian Trevor Burrus has unfortunately joined the ranks of libertarians against merit:Libertarians are often accused of advocating for a merit-based society. The free market, the argument goes, produces a distribution that more-or-less corresponds to how meritorious the people... MORE

Was Schindler Wrong? Philosophy professor Matt Zwolinski has an excellent video on sweatshops at LearnLiberty.org. LearnLiberty.org has given me permission to put it here. I basically like the video, although I have one question and one disagreement. My question is... MORE

Sheldon Richman, with whom I seem to agree well over 90 percent of the time, writes the following: Generations of government intervention have reduced workers' bargaining power in favor of employers. Any interference with the free market that suppresses competition... MORE

Thanks for many thoughtful comments on "If You Don't Like It." A few that particularly grabbed me:Tom P:I think we can give a friendlier interpretation to Roehling's terms. "Bargaining power": you spend many years working for a firm, developing human... MORE

Suppose your boss screams all the time, has extremely bad breath, or requires all his employees to speak in a faux British accent. Even today, the law usually offers you no recourse - except, of course, for "If you don't... MORE

One of the best ways to get a raise from your current employer is to get a better offer from a competing employer. You just tell your boss, "Match their offer or I walk." The risk, of course, is that... MORE

I've shown the following NBER abstract (from Hanushek, Woessmann, and Zhang) to several economists:Policy debates about the balance of vocational and general education programs focus on the school-to-work transition. But with rapid technological change, gains in youth employment from vocational... MORE

I'm having trouble finding any pre-existing academic literature on firing aversion. Google Scholar has two hits for "firing aversion" and zero hits for "hirer's remorse." Anyone know of any relevant research under another name?P.S. Much oblige to kenneth and steve... MORE

Americans spend a ton of time commuting. According to happiness researchers, commuting is the low point of the typical day. If you look at the jobs that people actually do, though, it's hard to understand why so many workers continue... MORE

In a guest post at Megan McArdle's blog yesterday, former political science professor Laura McKenna lays out some interesting data on colleges. She notes a shift of fairly high-quality students from private colleges to government colleges. The reason, she notes,... MORE

In the comments section on my recent post on unpaid internships, there was a lot of good discussion and the argument did advance somewhat. To his credit, Derek Thompson engaged in the debate in a positive way as did many... MORE

Derek Thompson at the Atlantic blog argues that unpaid internships are immoral. His case? The essence of it is that because the employer gets valuable services, the employer should pay for them. Of course, the employer does pay for them,... MORE

Lots of great feedback in response to last week's question, "Why don't applicants volunteer their test scores?" I'm increasingly impressed by the wide range of first-hand education/job experiences; clearly the world is full of puzzles few economists have ever conceived,... MORE

Plumer writes, while part of the story is clearly that the labor force is shrinking because the bad economy is driving workers out, another significant factor is that baby boomers are beginning to retire early -- a trend that has... MORE

Caro had a further epiphany about power in the early '60s. He had moved on to Newsday by then, where he discovered that he had a knack for investigative reporting, and was assigned to look into a plan by Robert... MORE

Mark Thoma reports, The US Has the Highest Share of Employees in Low Wage Work Check out his chart, which shows that other OECD countries have a smaller share of employees doing low-wage work. This seems like bad news for... MORE

One of the most powerful principles in economics, so powerful that I list it in my "Ten Pillars of Economic Wisdom," is that both sides gain from exchange. This helps resolve the issue stated by commenter "harold" on this earlier... MORE

FLA [Fair Labor Association] found that during some periods over the past 12 months, workers at all three facilities worked an average of more than 60 hours per week, exceeding the FLA code and Apple's own standard. The audits found... MORE

He writes, In every year since 1989, new companies have created more net jobs than the economy as a whole, which means that older companies are, on average, destroying more jobs than they create. In 2009, the latest year for... MORE

Bryan poses the issue of why bosses are reluctant to fire unproductive employees. My observations: 1. Firing involves a confrontation. You tend to want to avoid confrontations. In large organizations, the confrontation is indirect. The boss tells HR, and HR... MORE

"Why haven't they been fired?" Lots of great, non-dogmatic answers in the comments. Everyone sees a lot of deadwood, though I'm puzzled by the repeated suggestion that "The next person might be worse." If that's the concern, why not just... MORE

Three questions:1. What fraction of your co-workers are paid 125% or more of their true marginal product?2. What fraction of these overpaid/incompetent co-workers can you personally identify?3. Has the boss failed to fire these overpaid/incompetent workers because he doesn't know... MORE

Private sector unions have almost disappeared, but occupational licensing is all the rage. Almost 30% of all workers need a license to do their jobs - and licensed workers earn roughly a 15% wage premium.Occupational credentials are one common licensing... MORE

Public Radio International, to its credit, after some digging into claims made against Apple by Mike Daisey, not only found that he told a number of lies but also retracted its previous coverage in which PRI had assumed that he... MORE

Like Byran Caplan and Karl Smith, I think conversational evidence is important to pay attention to. And like Bryan, and unlike Karl, I do hear lots of conversation about the effect of marginal tax rates (MTR), especially on spouse's labor... MORE

A reader who remembers this essay suggested this chart: I lifted the chart from Barry Ritholtz, who in turn lifted it from paper by David Andolfatto and Marcela M. Williams. I think that the evidence for structural change as a... MORE

The BLS reports (note that by next month this link will be to a new report) that payroll employment over the past three months has increased by an average of 245,000 jobs. One of the patterns that Ed Leamer found... MORE

As co-blogger Bryan noted earlier today, Charles Murray advocates requiring that internships pay the at least the minimum wage, currently $7.25 an hour at the federal level. Is this because he, a perceptive and economically literate analyst, does not understand... MORE

Downton Abbey (season 1 streaming on Netflix) doesn't just live up to the hype. It also beautifully illustrates the power of firing aversion during the heydey of employment at will. Highly recommended.... MORE

Timothy Taylor writes, We need a convincing theory of this third kind of unemployment--sluggish unemployment, tar-pit unemployment--and an associated sense of what policies are useful for addressing it. Firms as a group have high profits and strong cash reserves, but... MORE

Why Oswald Rabbit Isn't as Famous as Mickey Mouse In his book, Knowledge and Decisions, one of my favorite books he has written, Thomas Sowell, in a section on "The Physical Fallacy," writes: A revealing episode in the early career... MORE

Where do economists draw the line between science and dogma? In most cases, they say something like this: "A model is scientific if and only if it makes true testable predictions." Perhaps this is why Arnold was dissatisfied by my... MORE

Over the years, In discussing the alleged decline in real U.S. median wages, I've pointed out that there are two important ways in which the growth in real wages has been understated: (1) The inflation adjustment used to compare wages... MORE

According to this amusing diagram in Cracked, facial tattoos mean "I will never have a job that pays taxes." Many economists would presumably insist, "It's not causal. The kind of people who tattoo their faces just have low productivity." I... MORE

Arnold says:I challenge any supporter of the sticky-wage story (Bryan? Scott?) to write a 500-word essay explaining how this graph does not contradict their view. If employment fluctuations consisted of movements along an aggregate labor demand schedule, then employment should... MORE

1. Todd Zywicki writes, the average home in foreclosure has been delinquent for 674 days--a delay that has doubled since the exposure of the robo-signing scandal ground the foreclosure process to a halt. In Florida, the time from default to... MORE

The effort to clean up and shut down Japan's crippled, leaking Fukushima Daiichi nuclear power facility will be long and dangerous. Just this week, two more workers in their 30s and 40s were reportedly exposed to potentially deadly amounts of... MORE

Atif Mian and Amir Sufi write, The aggregate demand channel for unemployment predicts that employment losses in the non-tradable sector are higher in high leverage U.S. counties that were most severely impacted by the balance sheet shock, while losses in... MORE

I gave a talk last night at the University of Rochester. The talk was titled "Do We Need to Go to War for Oil." It was nice to catch up with friends in Rochester and former colleagues: John Long and... MORE

In fiction (and "reality" television), firing workers almost seems fun. How many times has Mr. Burns gleefully hissed, "Fire than man, Smithers!"? In the real world, though, bosses dislike being the bearer of bad news. They feel guilty when they... MORE

The Adam Smith Institute has just released a paper of mine on patterns of sustainable specialization and trade. An excerpt: The PSST approach drops the assumption that production technology is known. Instead, the Smithian division of labour and Ricardian comparative... MORE

in the WSJ European edition. Unfortunately, the patterns of specialization and trade that had emerged five years ago were not sustainable. Many jobs in home construction, durable-goods manufacturing and distribution, and mortgage finance were dependent on housing markets with ever-rising... MORE

Bryan focuses our disagreement: when 10% of the workers in an occupation lose their jobs, or 5% of firms in an industry go out of business, continuity isn't merely a convenient assumption. It's a hard fact. So now it boils... MORE

Arnold writes:So, if the demand for mortgages collapses, all it takes to get back to 2006 levels is for mortgage underwriters to take a 20 percent pay cut? In a world with no discontinuities, we would not get crazy subprime... MORE

Arnold writes:Suppose that a bunch of mortgage underwriters get laid off. There are two possible full employment equilibria. (a) They can be instantly employed as dishwashers at 20 cents an hour. (b)They can be employed as health insurance claims processors... MORE

I'm an admirer of Charles Murray's Coming Apart. But two big blind spots stand out:1. Drugs. Murray chronicles the massive increase in the U.S. prison population without mentioning, much less condemning, the War on Drugs. [S]urveys on drug use wouldn't... MORE

For males, the college premium and the marriage premium are roughly equal. In the NLSY, for example, you earn 34% more if you're a college grad, and 44% more if you're a married male*: When people - economists and non-economists... MORE

In 2009, I bet John Quiggin that Europe's unemployment would average at least 1.5 percentage-points higher than the United States over the following decade. Quiggin's update:Until now, I've been consistently ahead. EU-15 and US unemployment rates were very close during... MORE

Keynesians have long mocked their critics as people who believe that the Great Depression was really a "Great Vacation." Charles Murray's new book makes a decent case that working class men have indeed taken a Great Vacation over the last... MORE

Walter Kurtz writes, Credit Suisse defines structurally impaired sectors to "include real estate related industries, finance, manufacturing, and the state and local government sector." These are the sectors that at least in part rode the "bubble" economy wave. Many of... MORE

The Power of Partial Derivatives Bryan Caplan's reasoning on income inequality is correct. Some of the commenters who think they disagree are pointing to the fact that rich people are often honored and praised. That's correct. They often are. That... MORE

I just finished Daniel Kahneman's Thinking, Fast and Slow. The book is a masterpiece. Most popular science books are 10% substance, 90% fluff. Kahneman reverses those percentages - yet remains a breezy joy to read. Thinking taught me much about... MORE

There are two conceptually distinct problems with standard estimates of the return to education (see here, here, and here for more).Problem #1: Ability bias. People with traits the labor market values (intelligence, work ethic, conformity, etc.) tend to get more... MORE

With this, Matt Yglesias instantly enters my sadly short list of good Keynesians:The depressing truth is that the easiest way to bring good, high-paying manufacturing jobs back to America is to make them less good and less well-paying...More goodness:[T]he reality... MORE

The authors carefully build their case, first telling of the various restrictions on who can be a lawyer. All but a few state governments, they note, require prospective lawyers to have graduated from a law school that the American Bar... MORE

A friend of mine who used to be a colleague at the Naval Postgraduate School, Patrick J. Parker, was a young student taking his first economics courses at Columbia University in the late 1940s. He was sitting in George Stigler's... MORE

Yoram Bauman, author of The Cartoon Introduction to Economics, asks some questions in the comments. Consider the following his guest post. I'll respond soon. On second thought, I miss arguing with you, Bryan, so I'll pick some bones: 1) What... MORE

For Parts I and II, see here and here. "One big advantage of free markets," I said, "is that they make wars less likely. When there is a lot of trade between countries, both sides have more to lose by... MORE

Bryan writes, Unemployment is just a labor surplus; since wages are the price of labor, the fundamental cause of unemployment has to be excessive wages. Nick Rowe writes, The only way to increase output in a demand-constrained economy is to... MORE

Here are some data on job losses in each recession since 1970 (I grouped together the two recessions in 1980-1982). I look at total losses in nonfarm payroll employment and losses in employment in the durable goods sector. The figures... MORE

Imagine interviewing the following two job applicants.Applicant #1: Currently unemployed.Applicant #2: Currently employed.Question: For each applicant, would you expect him to be (a) more productive than the average currently employed worker, (b) less productive, or (c) as productive? Why?... MORE

I assume that David's title was partly tongue-in-cheek. Anyway, consider what Kay Hymowitz writes. Between 1950 and 1980, Brooklyn lost half a million residents. And the blue-collar decline continues in the new millennium, with the borough losing more than 9,000... MORE

He writes, So here's the story. Union Pacific is offering $48,000 per year for skilled, highly specialized, journeyman work that's physically grueling and requires workers to be away from home about half of each month. The competition is offering 50%... MORE

Tyler Cowen comments, drawing a response from Bryan. I just don't think that the fraction of the healthy adult population with ZMP has risen much since the last time unemployment was 5%. Here is where the term sustainable in patterns... MORE

Tyler makes some thoughtful points on ZMP. Replies:1. There has been plenty of evidence for "labor hoarding"; oddly, once the ZMP workers start actually being fired, the concept suddenly becomes controversial. The simple insight is that firms don't hoard so... MORE

I'm glad Arnold clarified his thinking in his latest post. He had written, as recently as two days ago: But until the project manager comes up with a new plan, the other workers are all ZMP [capable of producing zero... MORE

An economist who attended a business conference told me that the trucking industry is doing well (probably a sign that the economy overall is improving). However, industry experts foresee a shortage of drivers next year. How is that? Some possibilities:... MORE

In his latest response to co-blogger Bryan Caplan on ZMP, co-blogger Arnold Kling writes: The point that third-world workers are employed refutes the Z in "zero marginal product." I would agree that American workers could compete for jobs at third-world... MORE

Federal Reserve economist Christopher L. Smith has a good paper on the topic. Since the start of the most recent recession, the employment‐population rate for high school‐age youth (16 and 17 year olds) has fallen from around 23 percent to... MORE

His post is here. I would say that there is a decent probability that he is correct. However, below are some potential counter-arguments. I will also address Don Boudreaux. On the point that past forecasts of technological unemployment have been... MORE

I highly recommend Lauren Rivera's "Ivies, Extracurriculars, and Exclusion" (Research in Social Stratification and Mobility 2011). Not only is the piece careful, edifying, and interesting; it's even emotionally affecting. Learning more about elite hiring actually replaced my apathy toward elite... MORE

Daniel Hamermesh has presented data showing that, all else equal, ugly people do worse economically and are less happy than the non-ugly. The Daily Show sent one of its crack interviewers to interview him. The result--this 5-minute video--is highly entertaining.... MORE

My brilliant former student Eli Dourado wonders why I'm so hostile to the Zero Marginal Productivity (ZMP) theory of high unemployment:It is hard to think of another idea that is more Caplanian. This is after all the man who pointed... MORE

Today at lunch we were discussing the predictability of career outcomes. How often do small chance events make or break a person's success? Eventually someone brought the case down to earth: What would have happened to me, Bryan Caplan, if... MORE

The broadest measure of employee compensation is called the employment cost index. It includes the cost of benefits, such as health insurance. It is available quarterly, starting in the first quarter of 2001. I used the private sector worker ECI.... MORE

In my last reply to Arnold, I asked for a "Guide to Discontinuity/ZMP for Skeptics." Arnold's response:The main evidence that I cite against the AD/AS story is the length of unemployment spells and the large number of workers who are... MORE

Mike Konczal writes, Every age group has seen a substantial drop in the employment-population ratio during this Lesser Depression, but no other group I've seen comes close to this plummet. For the first time in half a century, a majority... MORE

Bryan writes, What's the best available "Guide to Discontinuity/ZMP for Skeptics"? Non-economists have always been quick to believe stories about technological unemployment. Economists have been ridiculing this popular fear for centuries. What happened in the last three years that ought... MORE

My last post critiqued Arnold's PSST ("patterns of sustainable specialization and trade") alternative to the conventional aggregate supply/aggregate demand model:In Arnold's story, firms and workers violate the First Law of Wing Walking: Never let hold of what you've got until... MORE

Bryan writes then when technological change occurs, we should observe Cut wages in existing industries drastically enough to keep firms afloat and workers fully employed. That is true for small changes. Mathematically, it assumes continuous functions. It may not be... MORE

For the last couple of years, Arnold has been energetically promoting a macroeconomic alternative to the standard AS-AD model. He calls it PSST - "patterns of sustainable specialization and trade": I focus on patterns of trade to try to avoid... MORE

One of my closest conservative friends is chronically angry about (a) immigration and (b) affirmative action. The irony is that the immigration restrictions he so passionately favors are affirmative action - for native-born workers.Advocates of standard affirmative action see the... MORE

Many cities across the country subscribe to the concept of "public safety pay parity." From Atlanta to Dallas to New York City and San Francisco (and many cities in between), firefighters have effectively lobbied city and state governments to pay... MORE

If you were an employer, would you want to hire an Occupy Wall Street protester? Probably not. In fact, it's hard to imagine an employer seeing a protester on TV, then thinking, "I've got to hire him!" Protesters are arguably... MORE

Yesterday, while reviewing my tax withholdings, I noticed a weird anomaly. In 2011, for the first time in my life, my employer was paying more Social Security taxes than I was. I furrowed my brow until I remembered this earlier... MORE

Here's my segment on Stossel. It's the one where he interviews me alone about: Buy American, fair trade, and "sweatshops." But it doesn't have the segment where all 4 segments, including me, respond to the audience and challenge each other.... MORE

I don't usually gasp when I read the newspaper because not much surprises me any more. But Juliet Williams of Associated Press made me gasp. In an article on California governor's proposals to rein in the pensions of government workers,... MORE

Steve Lohr writes, During the last recession, the authors write, one in 12 people in sales lost their jobs, for example. And the downturn prompted many businesses to look harder at substituting technology for people, if possible. Since the end... MORE

I posted recently on John Goodman's and Virginia Traweek's post on nurse practitioners. There ensued on his site a lively debate among those who want to allow more room for NPs to practice and those who don't. Uwe Reinhardt, a... MORE

I was watching a recent episode of one of my favorite TV shows, Harry's Law. This line was so good that I paused and wrote it down word for word. A father comes to Tommy Jefferson, upset because his dead... MORE

On September 26, I wrote a blog post titled, "Note to David Stern and the NBA: Be Afraid; Be Very Afraid." In it, I noted that the NBA players' union had hired one of the smartest economists in the world,... MORE

I liked the comment thread on this post. A few paragraphs from Michael E. Sullivan's comment: You can get a huge return by hiring a personal assistant if your time is very valuable, but in order to achieve this, your... MORE

In an economy where some folks are very rich and many folks are unemployed, why are there not more personal servants? Why don't Sergey Brin and Bill Gates have hundreds of people on personal retainer? I pose this question as... MORE

This WSJ Story (you may have to News-Google it) is mostly about workers with the wrong skills for the current market. But I note this: BestCare Home Health Agency, a Fresno, Calif., nonprofit that provides nursing and other in-home health... MORE

This month's Feature Article on Econlib is "The Worldwide Decline in Conscription: A Victory for Economics?" by Beloit College economics professor Joshua C. Hall. Josh, who is a co-author of Economic Freedom in the World, shows that one component of... MORE

From the WSJ blog: Since the recession ended, businesses had increased their real spending on equipment and software by a strong 26%, while they have added almost nothing to their payrolls. The post's title also is eloquent.... MORE

Byran posted this morning on Moneyball. Here's what Charley Hooper and I wrote on it in our 2006 book (we probably wrote this segment in 2004), Making Great Decisions in Business and Life. Billy Beane Baseball One of the most... MORE

I felt a little guilty about my Job-seeker's Paradox post, knowing that I was channeling David Autor. So let me relieve my conscience by quoting at length from a paper that Autor wrote in April of 2010. Routine tasks as... MORE

Phil Bowermaster writes, Increasingly, perhaps, a job is something that we each have to create. We can't count on someone else to create one for us. That model is disappearing. We have to carve something out for ourselves, something that... MORE

1. Doug Irwin offers a monetarist explanation of the 1937 recession, based on gold sterilization. Scott Sumner is no doubt pumping his fist in the air. 2. Daniel Little on the Great Factor-Price Equalization. 3. Here is a thought I... MORE

Jonathan Rothwell and Alan Berube write, At the height of the recession in 2009, the average U.S. job required 13.54 years of education, up from 13.37 in 2005. The increase reflected layoffs in less-education intensive industries such as construction and... MORE

Nominal wages rarely fall - even when there's high unemployment. Part of the reason is regulation, of course. But even under laissez-faire, employers have to cope with human psychology. Almost all workers think that nominal wages cuts are unfair. And... MORE

That is the question that occurred to me after reading Tyler Cowen. If the employers don't want you at the high wage, and don't want you at the low wage, what might your perceived MP be, temporarily or not? MP... MORE

Consider a traditional society where all the men sell their labor and all the women keep house. You might think there's only one market, but there are actually two: The labor market and the mating market. Men use their wages... MORE

Tyler Cowen writes, Why don't the unemployed lower their wages to find a job? The more tragic you think unemployment is, the greater the puzzle here, and yet the people who stress the tragedy are often least likely to admit... MORE

Today I saw The Thumbsucker, a watchable movie about a troubled but talented 17-year-old with a bad thumb sucking habit. It got me thinking: What's the effect of thumb sucking on income? If the thumb sucker is flexible enough to... MORE

Manning Up's Kay Hymowitz writes the target essay for this month's Cato Unbound. In the first reaction essay, Jessica Bennett highlights the ways men remain more successful than women:[W]omen will still make up just a third of business-school students and... MORE

Stephen J. Rose gets it right. The "problem" with manufacturing is mainly productivity growth that permits fewer workers to produce more goods. As workers are freed from having to produce common goods and services, total output expands greatly. For example,... MORE

The latest GDP revisions have tightened the relationship between employment and GDP in this cycle compared to the unrevised data. Some advocates of an AD-AS story are ready to say, "Nothing structural to see here. The aggregate production function is... MORE

Both nominal wages and nominal housing prices are what economists call "downwardly inflexible." In most markets, falling demand swiftly leads to falling prices, and surpluses don't last long. But in labor and housing markets, market adjustment to negative demand shocks... MORE

Nick Schulz and I offer ideas, focused on the New Commanding Heights. imagine if state governments experimented by setting up healthcare enterprise zones. These would be areas where entrepreneurs could set up healthcare delivery systems without any rules concerning what... MORE

He writes, In particular, it's intriguing to brainstorm about certain kinds of jobs that are not extremely high on skills (not everyone is going to be a research scientist), but also aren't extreme low-wage jobs either. These would be jobs... MORE

After my last post, I spent a while playing with the GSS's job satisfaction data. I tried adding a kitchen sink of regressors to education and log real income: IQ, age, year, race, sex, church attendance, political ideology. The negative... MORE

More interesting stuff from Melvin Konner's The Evolution of Childhood:In the Six Cultures Study child rearing and behavior were measured among five farming and herding societies (in Kenya, the Phillipines, Japan, India, and Mexico) and a New England town... There... MORE

Even prior to the financial crisis, the median duration of unemployment was in severe recession territory. Now, it is through the roof. In manufacturing, it almost appears that employment and output are decoupled. Output can increase while employment declines... MORE

Karl Smith asks, If we accept that the labor market would clear at One Cent Per Year. Then the question is why has the labor market not cleared while at the same time the wage has not dropped to One... MORE

During the Republican debate in New Hampshire on Monday, Mike Patinsky asked how the candidates planned to return manufacturing jobs to the United States. Ron Paul answered first, claiming that we have exported our jobs. He connected it with Federal... MORE

Mark Thoma writes, Provide [income support for the unemployed] in return for jobs that do useful things for the community. That is, bridge the time while structural adjustments are underway with useful employment for those waiting for the structural changes... MORE

As I mentioned in a post last week, I was at a Liberty Fund seminar in Indianapolis last weekend at which we discussed Amartya Sen's The Idea of Justice. Before that, I had read only sections of his books and... MORE

Karl Smith is interested in some sort of bet. I, however, will predict that the US will achieve an average 5% real growth [rate] over a sustained period [of] say 12 quarters [or] more starting within five years. Tim Pawlenty... MORE

From CBS news: About 6.2 million Americans, 45.1 percent of all unemployed workers in this country, have been jobless for more than six months - a higher percentage than during the Great Depression. I read this as saying that, relative... MORE

Co-blogger Bryan raised two good questions the other day about unpaid internships. That gets to one of the points I often make when I talk about the minimum wage in speeches or in interviews: The government is saying, in effect,... MORE

1. If the minimum wage is a good idea, shouldn't unpaid internships be illegal as well? If not, why not? 2. Name the main arguments in favor of the legality of unpaid internships. Aren't all of them equally good arguments... MORE

Check out this segment from CBS News. Obama is questioned by a woman who just lost her government job--in the zoo. Obama, after hearing where she works, says: 1:25: "Workers like you--for the federal, state, and local government--are so important... MORE

For over two centuries, economists have spoken of "labor" as if it were homogeneous. Back in the real world, people were learning trades, becoming trained as professionals, starting businesses, and otherwise undertaking to differentiate themselves. Macroeconomics, as we know it,... MORE

As you know, it's Inventing Ourselves Out of Jobs? America's Debate over Technological Unemployment, 1929-1981., by Amy Sue Bix. It came out in 2000. I ordered it after seeing it referred to in A Great Leap Forward, the book I... MORE

As promised, here is my review essay on Alexander Field's A Great Leap Forward. I think the highlight of the essay is the table that lays out the six eras discussed in the book. How much does the current period... MORE

The employment situation report for May 6 shows a gain of 700,000 jobs over the three-month period February through April. One thing I learned from Ed Leamer's Macroeconomic Patterns and Stories is that there is momentum in employment. If history... MORE

Last week at the APEE meetings in Nassau, I saw economist George Ayittey give a talk on why most African economies are in such sad shape. He blamed the things free-market oriented economists tend to blame: foreign aid, the absence... MORE

In his comment on my post on child labor, Ryan Chamberlain argues against child labor, emphasizing child slavery, as if I had advocated child slavery. This is truly strange, given that I wrote: In other words, school goes beyond child... MORE

Robin Hanson has an excellent post on child labor that co-blogger Bryan Caplan has cited. I think Robin doesn't go far enough, though, in one respect. He points out that tiger moms often force their kids to do things that,... MORE

Patricia Minczeski writes on the WSJ blog, U.S. wages as measured in the Labor Department's employment report have been largely stagnant over the past few months, despite improvements in the job market. In fact, many industries saw more wage growth... MORE

Robin Hanson on child labor:Kids work hard at school, housework, sports, practicing music, supporting clubs, etc. and none of this cruelty is prevented by "child labor" laws. Such laws only prevent getting paid to work; they don't even stop kids... MORE

I may not have access to a computer when the employment report comes out today. It will be a very important report. The number to watch will be the three-month average of private sector job gains. This will include revised... MORE

According to Gallup, American workers who are emotionally disconnected from their work and workplace -- known as "actively disengaged" workers -- rate their lives more poorly than do those who are unemployed. Forty-two percent of actively disengaged workers are thriving... MORE

In a comment on my post, Minimum Wage: The Missing Explanation, Tom West writes: I'm not certain it's necessarily a net loss for the USA to have actually had labor laws and unionization that led to a middle class large... MORE

LET THEM WORK In essence, we have seen the rise of a large class of "zero marginal product workers," to coin a term. Their productivity may not be literally zero, but it is lower than the cost of training, employing,... MORE

'How,' ask Card and Krueger early in the book, 'can the general public, most governments, and many other social scientists disagree with the negative view of the minimum wage that is so widely held by economists?' (p. 7). The reader... MORE

Now that I've seen the Undercover Boss episode about the Cincinnati mayor, it's time to analyze. See here for my predictions. The bottom line is that I was on to something. Alex Tabarrok, in a comment on my previous post,... MORE

In which the author makes some predictions. My wife and I have watched about the last 4 episodes of "Undercover Boss" on CBS and are now hooked. All 4 have been private-sector for-profit companies and here's what I've noticed: 1.... MORE

In today's WaPost, political scientists Jacob S. Hacker and Paul Pierson argue that not only are unions good for their members but also that unions promote a strong middle class. Their main argument is that unions are a strong political... MORE

Dani Rodrik writes, In economies that don't exhibit large inter-sectoral productivity gaps or high and persistent unemployment, labor displacement would not have important implications for economy-wide productivity. In developing economies, on the other hand, the prospect that the displaced workers... MORE

Last month, Alex Tabarrok posted an interesting piece on the failure of Keynesian politics. Let's posit arguendo, he said, that Keynesian economics is correct: during a recession, if the government increases aggregate demand using tax cuts or government spending increases,... MORE

Labor unions like to portray collective bargaining as a basic civil liberty, akin to the freedoms of speech, press, assembly and religion. For a teachers union, collective bargaining means that suppliers of teacher services to all public school systems in... MORE

Tyler Cowen notes the apparent inconsistency between supporting both labor unions and aggregate demand expansion during a recession. The one seeks to raise real wages and the other seeks to lower them. I think it is hard to maintain a... MORE

Christian Stucchio writes, it looks like job losses in construction and manufacturing are huge! In contrast, job losses in finance or business are much smaller, government is flat, and health and education have actually gained jobs! On his post, you... MORE

We're hearing a lot in recent discussions of Wisconsin's government workers' unions about how newly elected Governor Scott Walker plans to limit or end the unions' collective bargaining rights. Here is a discussion by an opponent of Walker's move that,... MORE

In a hearing before a House Subcommittee headed by Congressman Ron Paul on February 9, Democratic Congressman William Lacy Clay attacked an economist who testified on monetary policy because the economist had written, among other things, the following: And as... MORE

1. AOL buys Huffington Post for over $300 million. I did not realize that April 1st came in February. 2. A License to Shampoo. The WSJ covers a topic that would be my focus is somebody made me "jobs czar."... MORE

This is an attempt to get at the notion of real adjustment costs in a model of Patterns of Sustainable Specialization and Trade. It is something like the Fischer Black model of macro, which influenced Tyler Cowen and me to... MORE

Or something like that. Via Greg Mankiw, I learn that the Hamilton Project has launched a prize competition to identify new and innovative thinking about policies to create jobs in the United States and enhance productivity. My suggestion would be... MORE

Supply curves slope up. Here's the joke: Man to woman: Would you sleep with me for one million dollars? Woman: Sure. Man: How about for ten dollars? Woman: What do you think I am? Man: We've already established what you... MORE

What I found most interesting in the comments on my latest post and in Bryan's response to my post was the wide range of views about how many immigrants would come to the United States in just a few years... MORE

I am going to react to three things: Nick Rowe talks about the fact that housing transaction volume is higher when prices are rising; Scott Sumner's latest attempted swindle; and the paper by Steven Gjerstad and Vernon L. Smith in... MORE

Here's a paragraph from a recent David Leonhardt story in the New York Times: In Germany and Canada, some companies and workers have averted layoffs by agreeing to cut everyone's hours and, thus, pay. In this country, average wages for... MORE

Jim Tankersley writes, The Great Recession wiped out what amounts to every U.S. job created in the 21st century. But even if the recession had never happened, if the economy had simply treaded water, the United States would have entered... MORE

Michael Mandel writes, This first chart shows the change in wage and salary payments by major industry from 2000-2009, adjusted for inflation, using BEA data. We see that healthcare and social assistance generated $210 billion in real wage gains from... MORE

He writes, Contrary to Sumner, there is no huge reallocation of construction workers (from January 2006 to April 2008) that Kling or the Austrians must explain. Scott Sumner used housing starts to suggest that most of the decline in housing... MORE

The New York Times asks various folks for their view of why jobs have not come back during this recovery. I recommend taking a longer view of the process. I think that a major reconfiguration of the U.S. economy has... MORE

Nick Rowe notes that Spain and Ireland also have seen unusually high productivity, and hence high unemployment, relative to output during this recession. Here's my guess. It's because all three countries had a big fall in construction. But what's so... MORE

Tyler's impressed that spending and output are up, but employment isn't. But the simplest story is just that employment is becoming a lagging indicator.* Consider: After the last "jobless recovery," the unemployment rate still fell to 4.9% by the end... MORE

The debate is hotting up, as our friends across the pond would say. Some random comments. 1. The Washington Post reports that some on the left want to see older workers encouraged to retire, to make room for young workers.... MORE

Brad DeLong writes, It seems fairly clear to me that calling this "structural change" is somewhat of a misnomer. Structural change is when workers find jobs in expanding industries. That happens overwhelmingly during booms. For workers to lose jobs in... MORE

In two separate blog posts, co-blogger Bryan addresses my comments on pacifism and then argues that people generally avoid fighting. I think he makes good points but he way overstated. First, Bryan stated: My prediction: If someone suddenly tried to... MORE

Richard Vedder and co-authors analyze the numbers. More than one-third of current working graduates are in jobs that do not require a degree, and the proportion appears to be rising rapidly...60 percent of the increased college graduate population between 1992... MORE

One story of the 1930's, which I discussed recently, is that agricultural workers were displaced by tractors and other forms of mechanization. I find this an interesting story, and I went on to I post Who Will Write This Paper?... MORE

Title: Fixed Worker Costs and the Distribution of Leisure Abstract: In an earlier paper, we showed that a change in technology can lead to an increase in leisure. In this paper, we explain how an increase in leisure can be... MORE

Michael Huemer isn't just my favorite living philosopher; he's also amazingly perceptive about the real world. The latest example: His FAQ on "Should I Go to Grad School in Philosophy?" Highlights:7. But I'm really smart, so I'll be one of the... MORE

An increase in U.S. aggregate labor demand reflected in rising job vacancies has not been accompanied by a similar decline in the unemployment rate. Some analysts maintain that unemployed workers lack the skills to fill available jobs, a mismatch that... MORE

Perhaps Cowen and Lemke. Here is my sketch: Title: Technology Shifts and Unemployment Abstract: We present a model in which shifts in technology cause unemployment. There are two types of workers, which we call Type C and Type S. A... MORE

They write, The fact that the United States has pre-crisis levels of output with fewer workers raises doubts as to whether those additional workers were producing very much in the first place. If a business owner fires 10 people and... MORE

I am trying to sort out my thinking on unemployment in the Recalculation Story. I think that a basic question is this: when workers lose jobs because a sector needs to shrink, this creates a pool of unemployed workers. Why... MORE

Two pointers from the indispensable Mark Thoma. 1. Catherine Rampell writes, A large fraction of displaced workers who have found new jobs have had to switch careers, and most of those career-changers have downgraded to a lower-paying job, according to... MORE

From the New York Times: Because payroll taxes and firing costs are still so high, businesses across Southern Europe are loath to hire new workers on a full-time basis, so young people increasingly are offered unpaid or low-paying internships, traineeships... MORE

[Irving] Howe ends by saying of Trotsky that "the example of his energy and heroism is likely to grip the imagination of generations to come," adding that, "even those of us who cannot heed his word may recognize that Leon... MORE

With perfectly flexible wages, it doesn't matter whether tax law says "employees pay" or "employers pay." Tax incidence depends on supply and demand elasticity, not legislative intent. If wages are nominally rigid, however, the law matters. If you cut a... MORE

Illegal immigrants are one of the few groups that modern Americans openly despise. Indeed, most people can't even say "illegal immigrants" without sneer italics. Illegal immigrants are also one of the few groups that effectively can't sue their employers for... MORE

Last week, Larry White interviewed me on the role of economists in ending the draft. It's now on-line. What led to the interview is this article that Econ Journal Watch published in 2005. Aside from my heavy breathing in places,... MORE

Bryan's various posts [here's one--the rest are easy to find with the Search function] on Eugene Richter's dystopian novel, Pictures of the Socialistic Future, persuaded me to read the book. I think Bryan nailed it in his Foreword in saying... MORE

Mike Konczal writes, The government's workforce is more educated than the private workforce. For instance, the government's "college plus" level is 54%, while all private workforce is 35%. "Some college" is 14% of government workers, 19% of the private workforce.... MORE

After a report showing a gain of 150,000 jobs last month, Mark Thoma says that the glass is half empty. it could have been worse, but in past recoveries we've had job growth of hundreds of thousands, far more that... MORE

Both Joel Kotkin and David Brooks seem to be struggling with this issue. They agree that middle America is in trouble. But who are we talking about? Kotkin writes, Since Obama's inauguration all the economic statistics vital to their lives--job... MORE

From the WSJ Real Time Economics blog, here and here. 1. Banks have an inventory of about 1 million foreclosed homes, plus another 5 million homes where the loans are badly nonperforming. Any way you look at it, that is... MORE

Annie Lowrey reports, The job market for lawyers is terrible, full stop--and that hits young lawyers, without professional track records and in need of training, worst. Though the National Association for Law Placement, an industry nonprofit group, reports that employment... MORE

On his blog yesterday, Mankiw has a great humorous YouTube done by, presumably, students at Harvard. Mankiw himself has a starring role and plays it beautifully. The video is professionally done also and even, in the midst of humor, shows... MORE

A commenter on my post yesterday asked me what I thought about California's Proposition 19, which would relax state and local government restrictions on marijuana. I voted for it because I want the government to let people do, in the... MORE

John Goodman writes, In four years' time, the minimum cost of labor will be a $7.25 cash minimum wage and a $5.89 health minimum wage (family), for a total of $13.14 an hour or about $27,331 a year. (I think... MORE

Alex Tabarrok writes, The first puzzle about unemployment when thought about from within the search-matching framework is that unemployment rates are highest among the least skilled, i.e. among those worker/jobs with the easiest matches. It's hard to believe that it... MORE

As Tyler reports, it goes to Peter A. Diamond (unqualified to be a Fed governor, according to some self-styled experts), Date T. Mortensen, and Christopher A. Pissarides. A few comments. 1. This appears to be for theories of labor matching.... MORE

The most strident objection to merit pay is that "merit" is utterly subjective. It's an interesting claim. But it's hardly an argument for basing pay on seniority. The natural implication of the unreality of merit, rather, is that we should... MORE

The employment situation reported today showed a decline in nonfarm payroll employment. That means that my favorite indicator, labor capacity utilization, is at its lowest level since the recession began. The National Bureau of Economic Research, which uses spending as... MORE

Gary Becker off-handedly remarks:Not surprisingly, teachers unions fight hardest against reforms that change the way teachers are paid, especially when they introduce incentives for teachers to perform more effectively.I don't doubt that unions tend to oppose merit pay, but the... MORE

1. Menzie Chinn offers charts that demonstrate that unemployment is highest in 2010 among those who had the lowest income in 2008. Does that mean that they have the stickiest wages? Just kidding. I think the one thing we could... MORE

You can watch the main event here, still going on this afternoon and tomorrow. I participated in a side show, not video streamed, about the future of the middle class. This was a large-group discussion, which was recorded, and at... MORE

Recalculation differs from textbook structural unemployment. In textbook structural unemployment, there are two GDP factories, one in the north and one in the south. There is a shortage of workers in the south, and there are too many workers in... MORE

A few days ago I posted about economist Peter Dorman's views on the minimum wage and just noticed that a few days later he replied as a commenter. This is my reply to him. Professor Dorman writes: Mainstream empirical research... MORE

In an article in Econ Journal Watch, David Hedengren, Dan Klein, and Carrie Milton present data showing a sharp divide among economists who sign petitions on economic policy issues. They segment the petitions into liberty-reducing and liberty-augmenting. Economists who signed... MORE

On Tuesday, September 28, the title of the conference is "The workforce of the future," the location is the Ronald Reagan Building, and the sponsor is the National Journal. The keynote speaker is supposed to be National Economic Council director... MORE

David Henderson's got two quibbles with my talk on immigration:First, [Bryan] says that if we didn't get rid of the minimum wage, legal immigrants would just get black-market jobs. That's true, but incomplete. Precisely because they would now be legal,... MORE

Unlike in previous wars, Congress did not wait for World War II's termination to dispense generous social welfare to veterans. An American legion sponsored Serviceman's Readjustment Act, popularly known as the GI Bill of Rights, sailed through Congress in 1944,... MORE

Bryan is right to record bets. In 2003, at the Mont Pelerin Society meetings in Chattanooga, I made a bet about the Middle East for outcomes in 2008. I bet $1,000, her acknowledgement of it was in my computer in-box,... MORE

I've grown slightly anxious about my bet with John Quiggin on European unemployment. But Sumner's a great therapist:An optimist like me would argue that we aren't about to copy the French statist model; dramatically higher minimum wages, generous UI benefits,... MORE

Megan McArdle writes, How much unemployment reduction you get for a given amount of stimulus spending is, obviously, at best an imperfect estimation. But let's take the CBO's estimates as representing a rough consensus of those who favor stimulus: for... MORE

Don Boudreaux has an excellent post taking on the myth that one reason Henry Ford paid the huge (at the time) daily wage of $5 was that he wanted workers to have more money to buy his cars. Don gives... MORE

In the early 1950s, American comics were edgy. Newsstands carried the usual kid stuff, but they also featured genres like graphic horror, true crime, and noir. Then came a fear-mongering psychiatrist, a Congressional inquiry, and threats of censorship. The industry... MORE

Minneapolis FRB President Narayana Kocherlakota says, I mentioned that the relationship between unemployment and job openings was stable from December 2000 through June 2008. Were that stable relationship still in place today, and given the current job opening rate of... MORE

In March, USA Today reported that federal employees were heavily overpaid, Peter Orszag countered with some apples-to-apples econometrics, and I objected that Orszag (a) seemed to ignore exceptionally generous federal benefits, and that (b) official benefit statistics fail to count... MORE

In chapter 10 of Macroeconomic Patterns and Stories, Ed Leamer writes, in recessions, the most price sensitive customers drop by the wayside, and what remains are the wealthy who don't care much about price. Facing this kind of customer base,... MORE

Obviously, I am going through Macroeconomic Patterns and Stories chapter by chapter. It is really too bad that he positioned it as a textbook, because I think that the rest of the profession needs to read it. Anyway, he signed... MORE

Continuing my relatively unplanned commentary on Macroeconomic Patterns and Stories, chapters 7 and 10 are on idleness. One can think of a recession as resources being idle, and then we wonder why they are idle when they could be productive.... MORE

The other day, I verified Ed Leamer's finding that there is momentum in payroll employment. This is an extremely important finding, as I will explain below. Just as a teaser, I think it strongly supports Tyler Cowen's ZMP story, but... MORE

Tyler Cowen writes, In a highly specialized modern economy, it is much easier to prevent jobs from being destroyed than to create them again, at least assuming those are "good" jobs in the first place. (Yes, people thought they knew... MORE

According to Ed Leamer's Macroeconomic Patterns and Stories, chapter 4, payroll employment is not a random walk. The change in payroll employment in August will be highly correlated with the average change from May through July. This was 26,667, according... MORE

Bryan weighs in on an issue of seasonal employment. This issue has produced much controversy among a few wonks. See the post by Mark Thoma. Almost 40 years ago, I was a seasonal teenage worker, in a factory in South... MORE

Casey Mulligan makes a thought-provoking point about summer employment:[N]ational employment was two million to three million higher in July than it was six months before (employment estimates vary somewhat between the business surveys and the household survey). [...] But it's... MORE

I am starting to re-read Ed Leamer's textbook, Macroeconomic Patterns and Stories. Very early, he presents a graph of real GDP from 1955 to 2005 on a log scale, showing that it grows at a trend rate of 3 percent,... MORE

In case you didn't notice, the reason why I outsourced my advice for the unemployed is that Tyler preceded it with, "Yet I have seen not one such post to the unemployed," and followed it with, "If such posts would... MORE

Tyler Cowen asks what is wrong with the labor market. He points to David Leonhardt, who writes, the downturn has still exacted a much harsher toll on the less educated. The unemployment rate for college graduates is still just 4.5... MORE

Non-ironically outsourced to Tyler Cowen:Hey guys, lower your wage demands! It's good for you! You'll get a job and avoid the soul-sucking ravages of idleness. It's good for the country! It's good for Bernanke, you'll get those regional Fed presidents... MORE

Bryan Caplan asks the normative question, "Is anyone willing to often even a semi-plausible economic argument in defense of mandatory national origin labels?" I'm not. But I do have an answer to this positive question: what is the origin of... MORE

This month's Feature Article on Econlib, by economist Robert Murphy, is the nicest succinct article I've seen on how free markets make people pay a price for the kind of discrimination that most people abhor. He points out also that... MORE

Alex Tabarrok writes, The U.S. housing vacancy rate--an unemployment rate for home--is at its highest level since at least 1965 (see figure). Why? Is it sticky prices? Lack of aggregate demand? Structural? For labor, the recalculation story says that employment... MORE

What the Blinder-Zandi paper does is explore the properties of a macroeconometric model. The economics profession abandoned those models thirty years ago, so the tool they are using is like a fossil, frozen in time. Of course, there have been... MORE

I said in my previous blog that I would give an unspecified prize to the best proposal for getting rid of a government ban on some peaceful activity. The prize, I said, would likely be simple recognition. I was heartened... MORE

The Economist asks about it. Paul Seabright answers: this recession, more than most, seems likely to have produced a great increase in the mismatch, due to the unsustainable patterns of consumption and investment induced by the credit boom that preceded... MORE

My wife and I were driving by a P.F. Chang's restaurant in Monterey today and we recalled how much hassle the city government gave the restaurant when it wanted to put a sculpture of a horse in front. The city... MORE

You ever get the feeling that some of these guys aren't the sharpest scimitars in the shed? That's what Gene Healy asks in his excellent article on terrorism. Here's another one: The notion of "savvy and sophisticated" Islamist supervillains is... MORE

Another nail in the coffin of Hong Kong's exceptionalism: Its first minimum wage law passed.Hong Kong's Legislative Council passed the Minimum Wage Bill on Saturday after a debate that lasted 41 hours. The law is set to take effect early... MORE

Tyler Cowen writes, In general, which hypotheses predict lots more short-term unemployment among the less educated, but among the long-term unemployed, a disproportionately high degree of older, more educated people? This stylized fact seems to point toward search and recalculation... MORE

Last week, I posed the following challenge:[T]he inevitable existence of some statistical discrimination doesn't make the practice immune to criticism. You can grant that it's OK to some degree, but - even if the law is silent - still limited... MORE

Arthur Laffer, whose work I've often respected and who, I think, has been underappreciated by the economics profession, has a piece in today's Wall Street Journal on unemployment insurance (UI). It's titled, "Unemployment Benefits Aren't Stimulus." I wish I could... MORE

Tim Kane finds that the tendency for a firm to add or subtract jobs declines with the age of the firm. Much of the job creation on average comes from startup firms. In fact, Kane puts it this way: without... MORE

No matter what they say, everyone engages in statistical discrimination. (See also here). Judging everyone as an individual is expensive, and relying on statistical generalizations is a cheap and effective alternative. You don't clutch your purse when you see a... MORE

Mark Thoma points to an interview with Robert Hall, who I consider the Don Sutton of the economics profession.* Read the whole thing. Here are some excerpts from the interview, with my comments. Issuing what appear to be overvalued public... MORE

Doc Merlin is among those linking to a New York Times story about manufacturers having difficulty finding skilled workers. I would love to say that I find that the story validates my views macroeconomics. Instead, I just find the story...odd.... MORE

This discusses labor markets. I also discussed them in my macro lectures, and I may want to integrate more of that material here. The full installment is below. This was the previous installment. Here is an excerpt of the current... MORE

James Hamilton writes, Suppose you adopted Feldstein's perspective that those individuals who fully expected to get back their old jobs soon are not really unemployed, but should instead be viewed the same way we treat workers who remain employed but... MORE

While I was away in Atlanta, Tyler asked, "How sticky are wages today?" His doubts:Keep in mind that unemployment rates today are disproportionately concentrated in low-income and low-education workers. Haven't we been told, for years, that these same individuals are... MORE

Internally at Econlog, GYOB means "get your own blog." It is a term of disparagement used to describe commenters who frequently post comments that are longer than the original post. In the case of Paul Seabright, I am thinking that... MORE

On John Stossel's show last week, a young girl put political scientist Ben Barber on the spot after he had advocated a minimum wage law. It starts at the 37 second point. Notice how clear she is in posing the... MORE

After talking to me about those figures, CNNMoney reporter Tami Luhby wrote, "Though Labor Department statistics say there are 5.5 job seekers for every opening, Reynolds said there is work available if people are willing to relocate or take jobs... MORE

Over at Marginal Revolution, Alex Tabarrok points out that much of the discussion of the Civil Rights Act is so 20th century. (My words for his thought.) One could even say "so 1960s." The reason: The Act was applied to... MORE

In today's Wall Street Journal, the editors have an editorial denouncing Kentucky candidate for the U.S. Senate, Rand Paul. It's strange. Here's the ending sentence of the first paragraph: But before we move on, it's important to understand why Mr.... MORE

Kentucky candidate for U.S. Senate Rand Paul has made waves lately by saying that he would not have supported the part of the 1964 Civil Rights Act that violates private persons' freedom of association. He stated that the parts of... MORE

Back in 2008, some of my favorite economists argued that unemployment wouldn't rise much, even if there were a big nominal shock. Why not? "Labor markets are more flexible than they used to be." Why? That was a little hazy,... MORE

Internal documents recently reviewed by Fortune, originally requested by Congress, show what the bill's critics predicted, and what its champions dreaded: many large companies are examining a course that was heretofore unthinkable, dumping the health care coverage they provide to... MORE

David Leonhardt looks at the behavior of real wages in the latest recession. A big reason wages have held up this time is inflation has been nearly absent. As some economic historians have pointed out to me, there is a... MORE

In 12th grade, I took a one-semester economics course. My high school didn't have A.P. econ (though I took the test on my own initiative), so the course was a little dumbed down. Actually, to be blunt, the teacher didn't... MORE

Even though I think the Human Development Index is fairly bogus, I still found this report on intra-American HDI quite interesting. Most striking factoid: white Americans stand about half-way between the "most-developed" group (Asians) and the "least-developed" group (Native Americans).HT:... MORE

My piece on how conscription came to America, titled "From 'Porous' to 'Ruthless' Conscription: 1776-1917," is out in the latest issue of Independent Review. An excerpt: As Robert Higgs insists, beliefs matter in social affairs (1987, 38). Although this idea... MORE

After my discussion this morning on KQED, I had an "aha" moment. It was when Craig called in at about the 40:40 point and the ensuing discussion, first by me, then by Sylvia Allegretto. Craig said that he has a... MORE

Again, I am pressed for time, so not many comments. 1. Tyler Cowen points to a story about an LSU professor teaching a biology course for non-majors who gave bad grades and was removed from teaching the class. LSU cited... MORE

Getting back from the APEE meetings in Las Vegas at midnight Tuesday, I didn't have time to read Tuesday's Wall Street Journal until this a.m. And there, in the top unsigned editorial (the Journal calls it "Review and Outlook"), was... MORE

The (subsidized) fix is in. There are over 400,000 NCAA student athletes. And just about all of us will be going pro in something other than sports. While the NCAA, with the above as its advertising line for the last... MORE

From Eugen Richter's Pictures of the Socialistic Future: In old days, in the stillness and purity of the maternal home, the young maiden used to carry on her business as a milliner, selling her wares for the most part to... MORE

Here's Mish's take on our unemployment bet. Frankly, he's got a pretty funny model of the economy. When Mish writes...There is always a chance that some new technological revolution will happen to undermine my pessimistic scenario. Certainly a development in... MORE

My talk in North Carolina. During the Q&A, I get attacked from the right. Michael Elsby, Bart Hobijn, and Ayseful Sahin discuss what is happening the labor market in the current recession. Recommended. Anne Applebaum argues that now that health... MORE

I'm back from the Kansas City econobloggers' conference. My personal highlight: I managed to extract a bet from Mike Shedlock, a.k.a. Mish. On the fiscal crisis panel, Mish predicted high unemployment for the next ten years. This provoked a lot... MORE

I've got two questions for Peter Orszag:1. You claim that education and age differences explain the entire difference in average pay between federal employers and other workers. Does "average pay" include benefits? The salary gap reported in USA Today was... MORE

Budget Director Peter Orszag writes, So the bottom line is: when education and age are held constant, the entire difference in average pay between the federal and private sectors disappears. Let me suggest a different indicator: How far could you... MORE

On the comments yesterday on my post on the effect of unemployment benefits on unemployment, Noah Yetter wrote: You have to pay taxes on unemployement benefits? Am I the only one who finds this to be unalloyed lunacy? I actually... MORE

Does standard microeconomics fail when there's a recession? Last week, I addressed the issue of how much of the current unemployment is due to the many extensions of unemployment benefits. In some states you can now receive benefits for as... MORE

Readers familiar with my fondness for graphic novels will know that when I recommend the graphic novelization of Studs Terkel's Working, it's no snub. In the original book, first published in 1972, Terkel interviewed people in a wide variety of... MORE

Belsky starts by asking, "Where do you draw the line where enhancement is acceptable?" Verstegen begins by taking about technology is producing better equipment, better technology and specifically discusses how the swimsuit used by athletes in Beijing allowed swimmers to... MORE

Bryan, in his earlier post today, refers to an excellent quote from Walter Block that I hadn't been aware of. I have some striking evidence for it that suggests that Walter actually understated the case. Here's the story. In about... MORE

Though participants agreed there was considerable slack in resource utilization, their judgments about the degree of slack varied. The several extensions of emergency unemployment insurance benefits appeared to have raised the measured unemployment rate, relative to levels recorded in past... MORE

The Wall Street Journal reports: The Monster Employment Index surged in February, with increases across a range of geographies and job categories, suggesting that employers are starting to emerge from a long hibernation. The Index, compiled by online job service... MORE

Eric S. Raymond writes, We've spent the last seventy years increasing the hidden overhead and downside risks associated with hiring a worker -- which meant the minimum revenue-per-employee threshold below which hiring doesn't make sense has crept up and up... MORE

Philosopher Rod Long recently argued that government intervention has practically ended the meritocracy of the market; I responded that the meritocracy of the market is still going strong, though it could be even stronger. Now at Forbes.com, Shikha Dalmia eloquently... MORE

When I teach labor economics, I debunk a caricature I call the "Standard History of Labor." The Standard History goes something like this:1. In the days before the minimum wage, unions, etc., life was terrible for workers because employers paid... MORE

In some areas, the system works in a blatantly self-interested way. Take Baltimore, where the police and firemen pension board recently passed a pension increase that, according to the Baltimore Sun, was "whopping," due to "[h]eavy stock market losses." The... MORE

Over at the "Division of Labor" blog, Art Carden has a great post on President Obama's State of the Union address. (Unfortunately, clicking on the link takes you to the site but not necessarily to the specific post.) Rather than... MORE

Yesterday, Chris Koresko, one of the commenters on my post on how the minimum wage had helped destroy the tuna canning industry in Samoa, stated: Please correct me if I'm wrong, but my vague memory is that the first minimum... MORE

Senators Charles E. Schumer and Orrin G. Hatch write, Starting immediately after enactment, any private-sector employer that hires a worker who had been unemployed for at least 60 days will not have to pay its 6.2 percent Social Security payroll... MORE

The island [Samoa] may lose its tuna industry. One cannery, Chicken of the Sea, has left. And because the U.S. Congress wanted to help Samoa by imposing American minimum wage, Governor Tulafono is worried that the last cannery, Starkist, could... MORE

In the latest Cato Unbound, Rod Long attacks Ayn Rand's view that actually-existing capitalism is highly meritocratic:Rand describes a "pyramid of ability" operating within capitalism, wherein the dull masses are carried along by the intelligent and enterprising few. "The man... MORE

Jonathan Gruber has gotten some negative press for not revealing that he received substantial payments from the Obama Administration while also writing a Washington Post article favoring Obama's proposed government interventions in medical care. The main thing I would add... MORE

False hope is not a free lunch. I've said it before:I suspect that students with who believe in malleable intelligence are more likely to go to graduate school despite low test scores. They'll probably get better grades because of their... MORE

In my neighborhood, many households would pay unskilled workers $30/hour or more to shovel snow. I would, that's for sure. But no one comes door-to-door offering these services. The obvious explanation is that (a) teens are the only unskilled workers... MORE

Alan S. Blinder writes, The last two quarters were even more extreme: Productivity in the nonfarm business sector grew at a shocking 8.1% annual rate. There are two possible explanations. One: The last two quarters were among the most technologically... MORE

One of Robin's most brilliant posts concludes:The standard views of techies about what techs will be feasible might be wrong, and the standard views of economists of how to forecast tech consequences might be wrong. And it is fine for... MORE

1. Cut pay for state, local, and Federal workers. Many people worry about governments having to cut back on employment. They see this as an argument for higher government spending. However, it is actually a much stronger argument for cutting... MORE

In the lead segment of "60 Minutes" last night, CBS did the unusual: it presented an incoherent story. The topic was gold being mined in the Congo, many of the proceeds of which are used for war. That was how... MORE

In an interview, Bruce Greenwald says, Basically, in the Depression a huge sector of the economy that everyone had always regarded as central, died. And it dies for an almost virtuous reason. That sector of course is agriculture. Because productivity... MORE

The Charles G. Koch Charitable Foundation is still taking applications for spring Internships in D.C. The deadline: December 4th. If you're a student who'd like to get paid to talk about the kinds of things you read on econ blogs,... MORE

Like Bryan, I received the same request from the same friend: what question(s) would I want to put on a survey of economists. My response was that I would want the question on the minimum wage asked accurately instead of... MORE

How can any economist - even Krugman - advocate job subsidies and work sharing? Krugman's answer is that it's a "third-best" solution. His top three:1. Sumnerian monetary policy. Seriously, but without the hat tip.2. More fiscal stimulus.3. Job subsidies and... MORE

As always, there are conflicting views on the economic outlook. Daniel Gross is optimistic. In the third quarter, productivity--econospeak for companies doing more work with the same amount of labor--rose at a 9.5 percent annual rate... But just as hamsters... MORE

The government is considering establishing work camps in the south of the country, where illegal migrant workers will receive shelter, food and medical care, Army Radio reported Wednesday. In exchange, illegal migrants would perform manual labor outside the camps, but... MORE

If all goes well this link will take you to an article (with cool charts!) where I make an empirical case for telling the Recalculation story rather than pretending that we have the same economy that existed in the 1930's... MORE

Tyler Cowen repeats a tweet, and I will too. It comes from Masonomist Garett Jones. Workers mostly build organizational capital, not final output. This explains high productivity per 'worker' during recessions. This is yet another difference between the labor force... MORE

Alex Tabarrok highlights a post by David Beckworth on the sharp decline in nominal spending in 2008-2009. Alex writes, We could use some inflation to get back on track. Nominal wages are simply not flexible enough to get the job... MORE

Many universities now have pay freezes or even nominal pay cuts. Under the circumstances, several professors have told me that there's little point in doing faculty evaluations. If there's zero - or negative - money for raises, why bother saying... MORE

In his New York Times column this morning, Ross Douthat considers various ways of reducing income inequality. While not endorsing higher taxes on high-income people, Douthat's takes it as given that such taxes would reduce inequality. Ignore the fact that... MORE

Robin's sounding strangely like a doom-sayer* lately:But as long as enough people are free to choose their fertility... then in the long run we should expect to see a substantial fraction of population with an heritable inclination to double their... MORE

The day my latest son was born, I quoted Julian Simon:One spring day about 1969 I visited the U.S. AID office on the outskirts of Washington, D.C., to discuss a project intended to lower fertility in less-developed countries. I arrived... MORE

Michael Mandel writes, The employment report shows that private sector employment in August 2009 was lower than it was in August 1999 Of course, August of 1999 was near the peak of the dotcom boom, and August of 2009 is... MORE

The present recession has increased private-sector unemployment to over ten percent, and feckless attempts by government to ameliorate the recession have greatly expanded government employment. I predict that BLS data for 2009 will show government unions crossing the 50 percent... MORE

Casey Mulligan's blog is a gold mine. My two highlights are his two latest blogs. First, he points out that, according to the household employment data, seasonally adjusted employment last month fell by about 400,000. He attributes some of this... MORE

One of the most striking things about Denmark and Sweden: Almost everyone is overqualified for his job. The guy who sells train tickets doesn't just punch buttons and collect cash; he knows his regional transit network like the back of... MORE

It is here. This is a very difficult thing for me to do, because economic forecasting is done under the hydraulic paradigm that I think we should try to abandon. Anyway, a sample: Traditionally, fiscal stimulus would increase the demand... MORE

The McKinsey Global Institute writes, 71 percent of U.S. workers are in jobs for which there has been a decrease in demand from employers, an increase in supply of eligible workers, or both. I gather that this was as of... MORE

In response to yesterday's post about the minimum wage, Bruce Bartlett mentioned an episode of Seinfeld. That, plus the comment after Bruce's, made me think of a different Seinfeld episode. One of the major points I made in yesterday's post... MORE

In my 2001 book, The Joy of Freedom: An Economist's Odyssey, I told of how unions have pushed for minimum wage laws to hamper low-wage competition (traditionally much of that competition came from black workers) and how some firms have... MORE

I recently pointed out that back in the good old days, Krugman would have graciously granted that a payroll tax hike is an especially bad idea when unemployment is high. In response, Kevin Drum notes that the tax hike doesn't... MORE

In the latest issue of Regulation, my review [.pdf] of Jeff Madrick's The Case for Big Government appears. One of my favorite grafs: If economic freedom works, he argues, our economy should be doing very well because we have had... MORE

The Krugman we've got is sold on the House health bill. But the Krugman we had, the thoughtful economist who wrote The Accidental Theorist, would have responded differently. Krugman Past, unlike Krugman Present, would have pointed out that when the... MORE

In a widely cited column last week, New York Times columnist David Brooks put capitalism as the first cause of the lack of dignity in modern American society. He wrote: First, there is capitalism. We are all encouraged to become... MORE

Definitely worth reading, with a variety of topics covered. On one topic, he says It's difficult to look at, for example, the very low unemployment rates we saw in the early 2000s and say that represented an economy in which... MORE

Not long after I started at GMU, Tyler approximately remarked that, "Bill Gates is just crazy - he works like a dog despite his billions." I don't remember how I responded at the time. But when I'm trying to understand... MORE

Tyler Cowen quotes the following paragraph from an interview with Paul Samuelson: Milton Friedman. Friedman had a solid MV = PQ doctrine from which he deviated very little all his life. By the way, he's about as smart a guy... MORE

Early in the Great Depression, President Herbert Hoover made things worse by persuading big businessmen to keep wages high. At those high wages, employers wanted to employ fewer people than otherwise. We are about to suffer another small dose of... MORE

Several economists I know say that labor markets have gotten more flexible in recent years. But are nominal pay cuts really happening to any significant degree? The only evidence that's come across my desk is from this piece, which claims... MORE

I'm pleased to report that noted blogger John Quiggin has accepted a slightly revised version of my proposed bet on European unemployment. The only revision: I sweetened the point spread to 1.5 percentage-points. Average European unemployment must be at least... MORE

Unlike the authors of the CEPR report, John Quiggin at Crooked Timber is willing to make me a bet about European vs. American unemployment. However, he wants to adjust for incarceration rates:I'm willing to take Bryan on, with one amendment.... MORE

When I see an abstract like this, the article goes straight to the top of my queue:The ability of personality traits to predict important life outcomes has traditionally been questioned because of the putative small effects of personality. In this... MORE

I'm going to offer the following bet to the authors of the CEPR report:The average European unemployment rate for 2009-2018 (i.e., the next decade) will be at least 1% higher than U.S. unemployment rate. The bet will be resolved when... MORE

"U.S. Unemployment Rate Now as High as Europe," gloats a new issue brief from the Center for Economic and Policy Research. The subtext: Europe's heavy labor market regulation isn't so bad after all. In fact, since the "case for the... MORE

After reading Walter Block's excellent defense of economic freedom indices, I made a wish that he would spend "more time doing creative empirical work, and a lot less defending Austrian economic theory against all challengers." Thanks to David Henderson, I... MORE

In the latest Econ Journal Watch, Stephenson and Wendt point out that virtually all labor econ textbooks ignore occupational licensing despite its empirical importance. In particular, they show that licensing matters a lot more in the U.S. than the minimum... MORE

I just came across a fun paper that asks "Is the Tendency to Engage in Self-employment Genetic?" (Management Science 2008). As usual, the answer is yes. Based on a sample of over 3000 British twins, the authors estimate that 48%... MORE

The discussion of the misnamed Employee Freedom of Choice Act is taking place at the local level as well as nationally. In our local newspaper, Chris Fitz wrote a pro-EFCA letter to which I responded. My response is below: "Let's... MORE

Gerald W. Scully, a first-rate economist, has died of pancreatic cancer. Jerry authored the article on sports in The Concise Encyclopedia of Economics. Although I chose him as the author and edited his piece, I never met Jerry. But economist... MORE

At CNN Money, Tyler explains how knowledge of behaviorial labor econ can save your job:Employers looking to cut personnel costs can either lay people off or lower their wages. Though there are exceptions, employers are generally more willing to do... MORE

If you've ever played around with wage or income data, you've probably noticed that married men make a lot more money than every other combo of gender and status. If your econometric model allows marriage to affect men's and women's... MORE

A quarter century ago, by a pre-white-haired John O'Sullivan, for The Foundation for Economic Education. Very rewarding to listen. For example, a bit over an hour into it, he makes the point that unions that force up wages in one... MORE

Abraham, et al on the differences between the household survey and the establishment survey of employment. And Glaeser and Gottlieb on the aggolomeration economies of cities. I have not found free online versions of either paper, though.... MORE

Just up on Forbes.com is an article by me on tomorrow's meeting between President Obama and Prime Minister Brown. It's titled, "Will Obama and Gordon Brown Cook Up a Tax Cartel?" In it, I talk about what they, as good... MORE

In a recent post, I said that whatever other mistakes Obama was making, at least he was repeating only 1 of 4 mistakes that Hoover/FDR (I think I'll start calling them Herbert Delano Roosevelt) made. Commenters pointed out correctly that... MORE

My favorite subplot in Brink Lindsey's "Nostalgianomics" is his tale of the decline of American unionization rates. He begins by ridiculing people who blame the change on virtually non-existent policy changes:Scrounging about for a policy explanation for declining unionization, Levy... MORE

More than one economist has told me that nominal wage rigidity is getting weaker during this recession. Now some journalists are saying the same thing (HT: Jacob Oost):More squeezed employers, though, are seeking an alternative to layoffs. They're turning to... MORE

Very well-put:Unfortunately, not all prices are flexible; wages especially are not. This is not primarily because of union or other employment contracts. Few private-sector employers in the United States are unionized and as a result few workers (other than federal... MORE

Here's a typically inane FDR quote:No business which depends for existence on paying less than living wages to its workers has any right to continue in this country.Taken literally, Roosevelt's norm is superfluous: If you don't pay your workers enough... MORE

On CNBC this morning, the talking heads pitched the new job loss figures in the most negative way. They focused on the fact that the 533,000 jobs lost (according to payroll data) were the highest in years, but they compared... MORE

On today's Forbes.com, I have a piece titled, "Has Bush Heard of Bastiat?" Forbes chose the title, but I think it's a good one. And I'm willing to bet dollars to doughnuts that Bush hasn't heard of Bastiat. I wouldn't... MORE

The main theme of this lecture is economic policy and labor market adjustment. My conjecture is that in our post-industrial economy, conventional Keynesian policies do not operate as they do in an industrial economy. Another issue is that the natural... MORE

So far, I have focused on unemployment as a problem of adjustment. In this essay, I review the history of the Dotcom recession, and I focus on the index of aggregate hours worked as an indicator of macroeconomic performance. According... MORE

In this lecture, I get to the punch line and offer my explanation of unemployment. Markets are constantly in adjustment, with the number of people in different occupations changing. Usually, the task of adjustment and adaptation goes remarkably smoothly. Occasionally,... MORE

I continue to focus on the issue of unemployment. In this lecture, I want to emphasize two things. One is the problems with popular intuition that jobs are scarce. The other is the wide variety of jobs, and hence labor... MORE

These lectures will cover macroeconomics as I think it should be taught, not the way it is normally taught. The focus is not on model-building. The focus is on the two most troubling questions in macro. 1.How is it that... MORE

Under current law, workers, to be represented, must vote in a secret ballot. The EFCA would give unions another way to monopolize a workplace: get a majority of workers to sign a card authorizing a union to represent them. This... MORE

Ezra Klein writes, It's an article of faith for some on the right that unions wreck productivity. Not in the private sector. I would be surprised if you had lower productivity in unionized firms. You can't have both lower productivity... MORE

One of Robert Lucas' most notable insights is that human capital (unlike, say, oil) moves from where it is scarce to where it is plentiful. (I thought Lucas had a very quotable line to this effect, but it doesn't seem... MORE

Jeff Miron has a whole op-ed on the wonders of the undergraduate econ major. But I think I can put the case for the econ major more succinctly. Here goes: Econ is the highest-paid of all the easy majors. My... MORE

From the latest issue of Entertainment Weekly:[S]ome producers fear that a strike is inevitable - especially since an estimated 80 percent of SAG members are unemployed and thus have nothing to lose by walking out.This is a cute quip, but... MORE

Well, it doesn't apply to me, but it's still great advice:One piece of advice for young women. Do a whole lot of planning early on. Be as strategic about your personal life as you are about your career. And find... MORE

I had a shockingly large turnout for my talk at SXSW Interactive in Austin. But the real surprise came during the book signing. I was seated next to Timothy Ferriss, author of The 4-Hour Workweek, and got a glimpse of... MORE

After blogging some simple regressions showing that, contra Harford, blacks actually have an unusually high return to education, I emailed my friend, and noted labor economist, Gordon Dahl, for further background. He gave me permission to reprint the following:Neal and... MORE

In my critique of Harford's chapter on statistical discrimination, I wrote:But is it really true that the market fails to reward blacks for getting more education? Is it even true that the market rewards them less? I tested these claims... MORE

There seems to be a lot of demand for me to blog some of my Harford-related regressions on black versus white returns to education. I'll try to satisfy this demand early next week. For now, though, I want to complain... MORE

I'm a fan of Tim Harford's Logic of Life, and I'm a big promoter of the explanatory power of statistical discrimination (see here, here, and here for starters; also check out my lecture notes). So naturally I'm thrilled that Tim's... MORE

As I've argued before, the best way to fight negative stereotypes is for people unfairly subject to the negative stereotype to use in-group peer pressure to raise the bar. In short: "Stop making me look bad!" Over at Agoraphilia, Glen... MORE

Most people would like to be described as "straight shooters." (I think). And many straight shooters are very successful. However, it seems like they also face a glass ceiling. Whether we're talking politics, business, or non-profits, we rarely see straight... MORE

More than one attendee at the Social Philosophy and Policy conference voiced dismay over David Horowitz's promotion of the Academic Bill of Rights. A typical plank:Curricula and reading lists in the humanities and social sciences should reflect the uncertainty and... MORE

Profit-maximizing employers should be gender-blind, right? Well, not quite. If, given all other information, women are less profitable to employ at a given wage than men, then profit-maximizing employers can't afford be gender-blind. That's the great lesson of the theory... MORE

Shrewd labor economics from the latest issue of Entertainment Weekly:For an actor, speaking out about contract demands may seem like a smart PR or legal move, but the strategy can often backfire in Hollywood when it comes to landing the... MORE

Alex Tabarrok doubts there's much discrimination against right-wing academics; I beg to differ. Now I'm getting some support from a surprising source: Though he's still making up his mind, Larry Summers is moving from a Tabarrokian starting point to a... MORE

After this morning's lecture on the life cycle model, I explained to my students that I'm never going to retire. Why would I give up a decent fraction of my income and most of my social network, when a professor's... MORE

Robert Shimer writes, Using United States data from 1948 to 2004, I find that there are substantial fluctuations in unemployed workers’ job finding probability at business cycle frequencies, while employed workers’ separation probability is comparative acyclic. This is particularly true... MORE

While the media focus on job creation--a classic case of make-work bias, I remain focused on the five-year average gain in productivity. Based on the revised second quarter figures, this five-year gain was at an average annual rate of 2.4... MORE

For those, like my co-blogger, who are interested in the issue of labor market discrimination, I again recommend Kevin Lang's new book, Poverty and Discrimination. On p. 314, Lang writes, if there is discrimination in the labor market, it is... MORE

Herrnstein and Murray's (HM) The Bell Curve famously reported that, controlling for cognitive ability, most or all of the black-white earnings gap disappears. An interesting chapter in Intelligence, Genes, and Success: Scientists Respond to The Bell Curve challenges this result... MORE

Have sexual harassment laws (and their stricter enforcement) noticeably reduced the probability of co-workers marrying? Have they noticeably reduced the probability of people getting married at all? If the workplace is one of the main places where people meet, it's... MORE

Economists who support the minimum wage realize that it is - at best - a small transfer. Why do they keep focusing on it? A common answer: The minimum wage has symbolic value. Here are two of Klein's respondents: A... MORE

I second Arnold's recommendation of the Klein-Dompe piece. Dan Klein is probably the greatest intellectual entrepreneur I know. Who else would see a petition to raise the minimum wage and think "Wow, what an opportunity to write a fascinating article"?... MORE

Daniel B. Klein and Stewart Dompe want to know why some economists favor raising the minimum wage. Here is one example: Arindrajit Dube: Increased income (and reduced inequality) has broad effects throughout society and polity; this includes (but is not... MORE

Suppose most economists believe that "Libertarian economists can't do math," and that, on average, they are correct. How does this affect libertarian economists' incentive to learn math? You could say that this stereotype will be self-fulfilling. If everyone assumes that... MORE

For me, one of the funnest parts of teaching undergraduate labor is when I lecture on why "the standard history of labor is wrong." I begin with a quick summary of what I take the standard view to be: Most... MORE

Here's the true story of Jane Galt, exploited PIRG employee who finally attained class consciousness. By way of contrast, every libertarian organization I ever gophered for treated me like family. I did however occasionally work extra hours off the books... MORE

I did the first podcast of my career on Friday - a chat with Russ Roberts about discrimination... which somehow morphed into my spiel about the relative wretchedness of the European standard of living. Overall, I had a swell time,... MORE

When men's incomes go up, everyone expects the demand for wives to go up as well. If average male income rises, men have to offer women a piece (maybe a large piece) of the increase if they want to attract... MORE

He writes, Controversy remains in the United States (and elsewhere) over the effects of the minimum wage mainly because past changes in the U.S. minimum wage have usually been too small to have large and easily detectable general effects on... MORE

Bryan discusses a blog post by Gary Becker on polygamy. Randall Parker sent an email pointing to a response by Steve Sailer (I cannot figure out a permalink, you may have to search for it). Monogamy is a cartel formed... MORE

I lectured on polygamy this morning; then, by pure coincidence, I came across Gary Becker's latest word on the subject. Highlight: Some oppose polygyny because they believe too many women would be "swept off their feet" by smooth-talking actual or... MORE

The prize for Phelps left me cold - until I learned that he said this: One can hardly imagine, I think, how poor we would be today were it not for the rapid population growth of the past to which... MORE

Russ Roberts notices the really big news about employment. Here's the last paragraph: The good news was that job gains for both July and August turned out to bigger than previously estimated, taking some of the bite out of September's... MORE

Once one of my wife's law professors polled her class on birth order. "How many of you are first-borns?" Two-thirds of the students raised their hands. Clear evidence that first-borns are achievers, right? Hardly. An alternative hypothesis is that law... MORE

In the latest Journal of Economic Perspectives, Steven J. Davis, R. Jason Faberman, and John Haltiwanger write, More than ten percent of U.S. workers separate from their employers each quarter. Some move directly to a new job with a different... MORE

Last week, when Econlog readers had the good luck to get Eric Crampton as a guest blogger, I had the good luck to find myself at Comic-Con, the world's largest comic book convention. I must not be quite the nerd... MORE

Tyler provides further evidence that there are serious problems in French labour markets... A clerk will spend half an hour "helping" a customer. I wait and wait. (It is worse than the Falls Church Public Library.) I do not understand... MORE

Tyler is once again handing out career advice to potential Ph.D. students in economics. I stand by my previous claim (here and here) that he makes some good points, but is far too negative. Where does Tyler go wrong? His... MORE

Don Boudreaux has come up with the first new way to explain the folly of the minimum wage I've read in years: Allow me here to spin the core argument -- that minimum-wage legislation prices many low-skilled workers out of... MORE

Ken Arrow scoffs at charges of academic discrimination against non-liberals: It’s hard for me to judge, of course, but I must say that my department contains a number of Republicans. And they were appointed by a democratic group, whose members... MORE

Arnold writes: My guess is that someone with a high IQ in an adverse cultural setting will not necessarily be healthy and wealthy. Someone with an average IQ in an achievement-oriented cultural setting will tend to achieve a lot. Both... MORE

I believe that IQ matters quite a lot for earnings, and that a lot of education is mere signaling. But I've recently reached an epiphany about the relationship between these two heresies. Note that the two heresies are distinct. You... MORE

Here's a paper that reminds me why I should be very grateful to be at George Mason's Econ Department: While in the 1970s it was difficult for less prestigious universities to compete on an equal footing with top institutions, which... MORE

I just watched the excellent Assassination of Richard Nixon. Sam Bicke, the bungling wannabe assassin played by Sean Penn, has a bunch of gripes against the world. But first and foremost, he wants a job where he'll never have to... MORE

Maybe the best take on the French labor strike comes from Charles Krauthammer. Yes, the old should be protected from precariousness because they are exhausted; the sick, because they are too weak. But privileged students under the age of 26?... MORE

Arnold writes: I think that policies like the minimum wage or the laws to force Wal-Mart to pay more in health care benefits are issues where the economic impact is small relative to the emotional activation. People on the left... MORE

I suspect that Larry Summers would still be president of Harvard if he hadn't shared his thoughts on gender imbalance in the sciences. Patri Friedman now advances the theory that men dominate in the sciences because their priorities are so... MORE

was pretty uninspired. In the middle of a four-minute segment on the public's fears about jobs, I get about 15 seconds to talk about "make-work bias," which is the term my co-blogger uses for the public's fear about processes that... MORE

The L.A. Times has a big expose about the union founded by Cesar Chavez: Today, a Times investigation has found, Chavez's heirs run a web of tax-exempt organizations that exploit his legacy and invoke the harsh lives of farmworkers to... MORE

According to George Reisman, Paul Krugman is now accusing Wal-Mart of destroying jobs. Krugman notes that Walmart’s competition against other retailers also destroys the jobs its competitors had offered before being put out of business by its competition. He attempts... MORE

Leadership Secrets of Attila the Hun wisely tells us: "Every Hun has value even if only to serve as a bad example." In this spirit, a coven of grad students has produced videos of nine really bad interviews to illustrate... MORE

While your earning a Ph.D. in economics, you learn two big lessons: 1. There's no such thing as a free lunch. 2. You are in serious pain. On reflection, though, I've decided that both of these lessons fall short of... MORE

Andrew Gelman links to a tantalizing summary of Warren Farrell's Why Men Earn More. As best as I can tell, Farrell's got 25 new control variables to add to the standard wage regressions. He... claims to have identified twenty-five tradeoffs... MORE

Unlike referees for academic journals, the blogosphere produces a lot constructive and thought-provoking criticism. Check out Biopolitical and Tyler Cowen's responses to my recent post on IQ. Biopolitical immediately brought up an issue worth elaborating on: I can see no... MORE

Lots of people loathe IQ research. But even people who are open-minded about IQ often puckishly say "So what?" It doesn't really matter if the IQ is the main determinant of earnings, or economic growth, or anything else. All that... MORE

John Ray has an interesting post on the effect of labor market regulations on Swedish women. The most striking finding he reports is that 75% of women in Sweden work in the public sector, compared to 25% of men: Swedish... MORE

Most people care a lot more about money than I do, but even so, almost no one wants to be married for their money. It's puzzling. You might say that since marriage is a long-term contract, people only want to... MORE

In a comment on the preceding post, Andrew Whitacre, who wrote the original rant, speculates, There are too many smart people for too few smarts-required jobs, just like there've never been enough English professorships for all the English majors who... MORE

Michael Mandel points to a blog post that claims we will face a severe nursing shortage. As usual, there is a government study supporting such a claim. In Learning Economics, I derided the notion of a labor shortage (in this... MORE

Graduate students would do well to heed Tyler Cowen's career advice. His council definitely helped me during my early years as an assistant professor. You could even call me his protege. But then and now I think his advice tends... MORE

David Card has a new study arguing that immigration has basically no effect on the wages of domestic low-skilled workers. This confirms his earlier results on the famed Mariel boatlift, when Castro freed 125,000 Cubans to flee to Miami. Is... MORE

Alberto Alesina, Edward Glaeser, and Bruce Sacerdote write, we show, in an accounting sense, that legally mandated holidays can explain 80 percent of the difference in weeks worked between the U.S. and Europe and 30 percent of the difference in... MORE

A new study finds that academia discriminates against right-wingers. Alex Tabarrok wishes it were true, but isn't buying it: I must admit that for a moment I enjoyed basking in my own victim hood. My failings are not my own... MORE

When people compare the U.S. and Europe, they often conclude that the U.S. is richer and more economically efficient, but that Europe is happier because they don't measure everything in dollars and cents (or even Marks and Pfennings). One of... MORE

Robert Hall writes Unemployment rises not because of a bulge of layoffs but because workers entering job search—from previous jobs, from school, and from home activities—experience unusual difficulty in finding jobs. Among other things, this means that stories on layoffs,... MORE

What was Hitler's argument for attacking other countries? You might think he didn't have one, but he did. His argument is frankly Malthusian: Our population is growing, and we will run out of food unless we get more land. (My... MORE

Sin City opens on April 1, I haven't been as enthuiastic about a movie trailer since The Return of the King. And it's got a cool backstory too. Director Robert Rodriguez dropped out of the Directors Guild of America (DGA)... MORE

In a classic episode of Seinfeld, George Costanza realized that his instincts were fundamentally wrong, and vowed to "do the opposite": George: Elaine, bald men, with no jobs, and no money, who live with their parents, don't approach strange women.... MORE

My colleague Robin Hanson has schooled me in the ABCs of the Men's Rights Movement. Bottom line: There are a lot of things that a lot of men could reasonably complain about, but don't, because they would be greeted with... MORE

This is the season for giving movies their just deserts, but as far as I know there isn't a prize for Most Economically Literate Movie. Until now. The First Annual Prize in this category goes too... A Day Without a... MORE

I attended most of this Cato Institute Conference on trade, outsourcing, and the labor market. A few notes: Federal Reserve Board Vice-Chairman Roger Ferguson's opening speech was outstanding. I commend it to anyone who teaches undergraduate economics as a useful... MORE

Bruce Nussbaum of Business Week writes, the surge in companies going to India, China, and Eastern Europe in search of very cheap brainpower may soon be coming to an end -- far sooner than anyone has anticipated. Why? Simply put,... MORE

Tyler Cowen lists ten possible explanations for the weak labor market in this recovery. He concludes But I would sooner call the whole thing a continuing mystery. Note that most of these hypotheses imply that the economy can still become... MORE

This post by Ben Muse shows the potential for mischief in talking about declining wages. He cites an article by Michael Pakko and quotes Pakko as saying, Having reached a peak of 58 percent in 1970, wages and salaries have... MORE

Asymmetrical Information links to Random Jottings, who quotes an anonymous economist on the possibility that the payroll employment survey double-counts jobs whenever the labor market gets so tight that workers take new jobs before their old employers can even update... MORE

Julian Sanchez picked up from Gene Healy a Times of India story with a new twist on outsourcing. Says a programmer on Slashdot.org who outsourced his job: "About a year ago I hired a developer in India to do my... MORE

Two pieces in the New York Times discuss the labor market. Alan Krueger talks about the issue of defining a "good job." Neoclassical economics hardly recognizes a distinction between good jobs and bad ones. All workers are supposed to be... MORE

Frank Levy and Richard J. Murnane predict that computer automation is leading to a split in the labor market. Good jobs will increasingly require expert thinking and complex communication. Jobs that do not require these tasks will not pay a... MORE

The OECD looks at total hours worked in its member countries. The performance of US labour markets also looks quite strong when assessed in terms of hours worked per capita, a more comprehensive measure of “labour utilisation” than the employment... MORE

Glen Whitman writes, The minimum-wage advocates who have thought much about it (of course, many haven't) usually have in mind some kind of monopsony model - that is, they assume a market in which employers have some degree of monopoly... MORE

Bruce Bartlett pointed to a Dallas Fed analysis of the causes and consequences of higher productivity. One of the sections, on the evolution of work, says The United States will continue to move up the hierarchy of human talents as... MORE

In my favorite musical, The Music Man, there is climactic scene in which the mayor calls for Professor Harold Hill to be tarred and feathered. "Where's the band?" the mayor shouts rhetorically. "Where's the Band?" Whereupon the boys in the... MORE

The grocery workers in the Washington DC area are thinking about going on strike. The president of the union representing 18,000 Washington area Giant Food and Safeway Inc. employees believes "there is a serious possibility" that upcoming contract negotiations will... MORE

The divergence between the payroll survey and the household survey of employment has been a big issue over the past year. The Bureau of Labor Statistics recently offered its analysis. The whole article is worth reading. Here are a few... MORE

Robert Barro tosses in his $.02 about the divergence between payroll and household employment growth: since the peak of payroll employment in March 2001, household employment has risen by 700,000, while payroll has fallen by 2.4 million, so that household... MORE

Noam Scheiber argues that the Bush tax cuts in fact were stimulative. Liberals in Congress and at places like the Economic Policy Institute complain that the Bushies should have targeted the bulk of their tax cuts toward the working poor... MORE

Tim Kane has written a timely paper on the behavior of the payroll survey, which is the source of data showing disappointing employment numbers. The key point is this: The payroll survey double-counts any individual who changes jobs during the... MORE

In this essay, I argue that Congress treats economists the way the Inquisition treated heretics. Why do the Inquisitors have it in for economists? Ultimately, politicians tell the people what we want to hear. They think that we want to... MORE

Russell Roberts speculates on what might happen if Indian outsourcing really gets out of hand. suppose Indians decided to work for free and give away the software, the ultimate competitive threat. If outsourcing work to low-wage Indians is bad, surely... MORE

Stuart Anderson looks at the arithmetic of Indiana's effort to save jobs from outsourcing. Out of 65 contract employees, Tata would have employed a number of Hoosiers through an Indiana-based subcontractor, but would also have used Indians currently employed by... MORE

Virginia Postrel thinks that the Bureau of Labor Statistics may be under-estimating employment. the bureau has missed more than 300,000 manicurists. It puts the total at around 30,000, compared with the count of 372,000 -- up from 189,000 a decade... MORE

Caitlin Flanagan's cover story (as of this writing, not yet on line) for the March issue of The Atlantic Monthly is on the crucial role played by female immigrant workers in the "have-it-all" lifestyle of professional women with children. one... MORE

I have a new essay that argues that we over-estimate the value of collective benefits. Contrary to my training as an economist, I believe that at least some of the preference that workers have for in-kind benefits reflects flat-out irrationality.... MORE

An engineer from India emails me, The purchasing power parity in India is 5 compared to USA - a 20000 $ programmer in India is actually making 100,000 $ in terms of his spending power. ...an average programmer in India... MORE

In my essay, I made an off-hand comment. If the households and businesses that hire illegal immigrants do so in order to save the cost of paying taxes, and they will not pay the taxes even when an employment agency... MORE

We will get more news this Friday, but meanwhile Paul Krugman has stirred up a lot of invective, pro and con, with his comment that Such measures as the length of time it takes laid-off workers to get new jobs... MORE

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